It has just been announced that Binance is bringing intelligence and anti-money laundering tools developed by CipherTrace, the provider of cryptocurrency intelligence and blockchain security, to its Binance Chain blockchain. This public blockchain is the platform that hosts Binance's decentralized exchange DEX designed for transfers and the trading of digital assets and BNB, Binance’s own token. With CipherTrace's solution, Binance Chain will be able to implement "institutional-grade" anti-money laundering (AML) controls to ensure transparency and regulatory compliance. Developers, investors, and regulators will be able to use the new AML system to track transactions on Binance Chain in order to identify high-risk addresses and protect decentralized applications (DApps) and other crypto-driven apps. It is expected that this move will also attract developers interested in building compliant and secure mainstream applications.
Earlier this year, Binance announced its plans to implement the CipherTrace technology as a solution to the so-called travel rule that was recently recommended by the Financial Action Task Force (FATF). The FATF's guidance urged regulators to make crypto exchanges track and retain KYC ("Know Your Customer") information for both senders and recipients of transactions and share it with other entities.
Samuel Lim, Binance Chief Compliance Officer, released an official statement about the partnership with CipherTrace, in which he expressed his belief that the implementation of the new AML system is good news for the Binance Chain user community. "While we constantly strengthen our compliance and security controls to align with global regulatory standards, we stay true to our roots of being user-centric," he said. "This partnership with CipherTrace would ultimately encourage greater community involvement, developer participation and public interest in Binance Chain and pave the way for larger mainstream adoption."