The world leading blockchain firm Chainalysis has just launched support for two privacy-centric cryptocurrencies that would take advantage of the features borne in Chainalysis Reactor and KYT (Know Your Transaction) tools – Dash and Zcash.
Through a formal announcement, the company provided a real world perspective of the much-needed balance between compliance and privacy, and linked the two subjects to the significance of the Reactor and KYT protocols.
In brief, Chainalysis Reactor is an investigation tool that ties real-world entities to to crypto activity while on the other hand, KYT employs blockchain intelligence, a user friendly interface and an API to harmonize manual workloads and assist crypto firms to deal adhere to regulatory requirements.
At this point, Chainalysis provides that users of the Reactor tool will have the benefit of monitoring cryptocurrency transactions – considering that both Dash and Zcash account for more than $1.5 billion in daily cryptocurrency trading volumes.
Dash and Zcash have established themselves as the ideal cryptocurrencies for users concerned about privacy on the blockchain. The former employs the PrivateSend option, an integrated coin mixing framework, to achieve this goal.
On the other hand, Zcash boasts of having a shielding function that enables users to conceal their blockchain activity, an aspect that has been hailed by experts as an effective privacy framework that performs better than digital currency mixers.
Otherwise, the Chainalysis blog alerted users about an important point – although Dash has a decent attribute for anonymous transactions, the possibility that transactional elements occurring via PrivateSend can be linked together – in some cases, the source address of a relevant crypto wallet can be figured out.
To add, statistics have shown that the privacy tools belonging to both Dash and Zcash are underutilized – PrivateSend technology is used in only 9 percent of Dash transactions while about 14 percent of all Zcash transactions employ shading pools.
As mentioned above, a large percentage of crypto volumes transacted in Zcash and Dash have been found to be associated with non-privacy usage. A study by the RAND Corporation, which was conducted on behalf of Zcash, showed that there was a measly 0.2% of Dash and Zcash mentions in the dark web when compared to all the other digital currencies.
The Intersection Between Privacy and Compliance
Zcash and Dash enable users to transact cryptocurrency with enhanced privacy when compared to other crypto networks. While this fact may be appealing to a host of users, blockchain experts intimate that both cryptocurrencies do not guarantee absolute anonymity.
Concerning the above premise, it turns out that the privacy features of Zcash and Dash – in terms of their technological fabric and operational characteristics – offer some loopholes that allow law enforcement and compliance officials to police suspicious or illegal activities, and enforce compliance.
In highlight, the latest deal by Chainalysis to offer support to the two cryptocurrencies will enable crypto firms to integrate Zcash and Dash into their compliance programs.
Otherwise, on another note, Andreas Antonopoulos, a reputed cryptophilosophy pundit, claimed that organizations like Chainalysis infringe the civil rights of scores of people across the world.
More – Crypto Exchange ZebPay Partners with Chainalysis
ZebPay, a crypto exchange and wallet service provider in Singapore, ratified a partnership with Chainalysis to enhance its compliance standards and enhance transactional investigations in the Indian market.
According to a May 2020 press release, the exchange moved to bolster its surveillance capacity in the local market in response to the spate of regulatory frameworks concerning the state of cryptocurrency trading in India.
While responding to the latest developments, ZebPay’s President Avinash Shekhar reflected on the firm’s desire to establish a robust compliance program in India from the time the company broke ground in the country.