Malta is reportedly turning to crypto sleuthing startup CipherTrace in order to get technical help addressing the risk of financial crimes in its licensed digital asset industry.
The countries top authority in finances which is the Malta Financial Services Authority (MFSA) announced March 11 that it would be integrating CipherTrace’s Compliance Monitoring product to “protect consumers, investors and business partners”
CipherTrace’s compliance Monitoring product uses blockchain analytics and forensics to look out for “suspicious” addresses and wallets, according to CipherTrace’s website. The firm says it profiles ATMs, Coin Mixers, and Money laundering systems, as well as known criminal addresses, to score transactions and gauge the level of risk.
Machine learning and analytics are useful when it comes to estimating transactional risk based on activity related to the identified addresses and wallets. The Malta financial services authority (MFSA) said the system also de-anonymizes blockchain addresses, which allows regulators to “evaluate and monitor the trustworthiness of virtual asset businesses.”
MFSA CEO Joseph Cuschieri said;
“Being strongly aware of the money laundering and financing of terrorism risks associated with entities operating in this sphere, the decision has been taken to engage the services of CipherTrace in order to reduce fraud and detect transactions with illegal sources of funds.”
CipherTrace’ said in an email that the integration would provide risk ratings on Malta’s crypto operators to “evaluate their trustworthiness and continuously monitor them for compliance.” The MFSA will track the risks relating to digital asset businesses, including crypto exchanges, collective investment schemes, and initial coin offerings (ICOs).
In connection to this CipherTrace CEO Dave Jevans, had this to say;
“Crypto-currency businesses often have difficulty establishing trust and maintaining banking relationships because of their perceived risk.”
CipherTrace’s tools can help financial institutions decide which crypto businesses to trust and go with while at the same time preventing the same financial institutions from declining “valuable customers”.
CipherTrace announced in Feb 20 that it had raised $15 million from investors one of which was Galaxy digital’s founder and CEO Mike Novogratz. The financing round was led by Aspect ventures, with Neotribe Ventures, and WestWave Capital also participating.
The issue of security has plagued the crypto sector for a long time and has left investors fidgety. Despite the fact that wallet developers are increasingly beefing up security around crypto’s, regulators are still asking questions. Malta considered a haven for blockchain and cryptos will undoubtedly be on the spotlight with commentators keenly observing the moves they make with regard to security.
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