Chainalysis, the leading blockchain and crypto analysis firm globally, has announced its partnership with Paxful, a global, peer-to-peer (P2P) Bitcoin marketplace and the largest in Africa, for increased security over transactions on the platform.
Paxful currently hosts over three million wallets, 45% of which are from Africa. The continent also boasts the fastest growth statistics at 25% volume growth YoY.
Paxful will now use Chainalysis KYT (Know Your Transaction) to monitor its platform’s cryptocurrency transactions in real-time and Chainalysis Reactor to build investigations when it detects suspicious activity. Together, these tools amplify Paxful’s compliance expertise and set a new compliance benchmark for P2P cryptocurrency exchanges globally.
The new partnership adds the following new controls and levels of security and compliance on Paxful:
- New controls for customer protection
- Transaction blocking for high-risk addresses linked to terror financing
- New controls for sanctioned addresses
- New controls for child abuse websites
- New controls for stolen credit card websites
The above controls will be made possible by leveraging the Chainalysis Know Your Transaction (KYT) engine that will enable Paxful to do the following:
- Monitor large volumes of crypto activity
- Identify high-risk transactions on a continuous basis
- Real-time alerts on the highest-risk activity
- Enhanced due diligence
- Allow compliance teams to focus on the most urgent activity
- Better allocate resources to enforce compliance policies
- Fulfill their regulatory obligations to report suspicious activity
P2P exchanges have historically been viewed as having questionable safety and inherently risky by Chainalysis due to their lack of required user data. However, the Paxful partnership seem to have set a new precedent, and opens a new way into how Chainalysis evaluates P2P marketplaces.
“Through working with Paxful, Chainalysis is evolving its policy and will evaluate P2P exchanges on a case-by-case basis before labeling them as risky, just as it does for other cryptocurrency exchanges.
Paxful is setting a new standard for compliance at P2P exchanges,” Paxful CEO Ray Youssef told Cointelegraph. “Chainalysis is changing its policy based on the strides P2P exchanges like Paxful have made.” ~ Ray Youssef, CEO, Paxful
Speaking about the partnership, John Dempsey, VP Product, Chainalysis:
“Compliance is the key factor for establishing trust in cryptocurrency exchanges. By adopting a case-by-case approach to evaluating P2P venues, we are helping to broaden trust and transparency across the cryptocurrency ecosystem.”
Chainalysis Reactor assists cryptocurrency businesses including Paxful to further investigate suspicious transactions and provide more detailed reporting to regulators and law enforcement on criminal activity such as fraud, extortion, and money laundering on the blockchain.
In a recent blog post, Paxful, the peer-to-peer Bitcoin marketplace, revealed that Africa is the fastest-growing region and accounted for over 25% volume growth, which is a significant amount from the $1.6 billion that the company processed in trade volumes globally in 2019 alone. The company has been experiencing this steady growth from Africa year-on-year since its inception in 2015.