Chainalysis, a renowned blockchain and crypto analytics company, is partnering with Paxful, a global leader in peer-to-peer (P2P) crypto markets, to enforce a new standard that will enable the platform to advance its security features on transactions.
Currently, Paxful has a massive database exceeding three million wallets, most of which have African roots. The firm is considered to be the largest Bitcoin marketplace in Africa, and controlling 45% of the continent’s Bitcoin wallets, a figure that reflects into the reported 25% volume growth year-over-year.
In the collaboration, Paxful will now employ the Chainalysis KYT (Know Your Transaction) to manage its crypto transactions on a real-time basis. In addition, the firm will use the Chainalysis Reactor to establish probes whenever suspicious activities are noticed on their platform.
The combination of Chainalysis KYT and Reactor will go a long way in reinforcing Paxful’s compliance capability and set a whole new standard for P2P crypto exchanges across the globe. In perspective, the partnership will bring the following controls and security protocols in Paxful’s favor:
- A new set of tools for customer security.
- New controls for blocking cybercriminal web addresses.
- Regulatory frameworks for flagged web addresses.
- The capability for Paxful to block any transactions emanating from high-risk addresses associated with terror funding.
- Controls against child abuse-related sites.
The above elements will swing into effect by plugging the Chainalysis KYT engine, and thus enabling Paxful to achieve:
- The power to monitor massive volumes of cryptocurrency transactions.
- The ability to point out high-risk crypto dealing on a real-time basis.
- The capability to provide continuous alerts on the highest-risk crypto dealing.
- An enhanced resource capital to enable the firm perform its functions diligently.
- Efficiency in the context of compliance team work – the teams will be able to prioritize activities accordingly.
- Utmost compliance on the part of Paxful customers.
- The fulfillment of the legal requirement to detect and alert the authorities on any suspicious activities on their platform.
A Timely Solution
Hitherto, P2P crypto exchanges have been generally viewed as having safety shortfalls as written by a host of online articles. This aspect stems from the fact that historical analysts have highlighted the inherent risks encountered by customers when buying crypto from these kind of exchanges, specifically considering that they do not require user data in sanctioning transactions.
However, the Paxful-Chainalysis collaboration seems promising as is sets a new precedent in crypto trade by establishing a clear pathway in which Chainalysis will study P2P market platforms.
While speaking to Cointelegraph, Paxul CEO underscored the importance of the new partnership through the lens of policy – Chainalysis will be able to gauge P2P exchanges through a case-by-case perspective that will rule out any possible generalizations that the firm may have done concerning the market risks.
All the while, Paxful will serve as the new example in P2P compliance within the context of crypto exchanges – leading to the bolstering on important achievements that have been made in the crypto trading industry.
To comment on the new development, the Chainalysis VP Product John Dempsey reflected on the importance of compliance in restoring the lost trust in crypto exchanges. Specifically, the adoption of a case-by-case system of analysis in crypto exchange evaluation will go a long way to foster transparency in the industry.