Chainalysis, a well-known company specializing in Blockchain network data analysis, is currently working on software to monitor compliance with economic sanctions.
The idea behind the project is to bring exchanges and DeFi systems under greater regulatory supervision.
Exchanges under supervision
Chainalysis is currently working intensively on implementing two helpful tools that will make it easier for companies subject to economic sanctions to comply with the imposed restrictions.
The dedicated software will be available for free.
Tracking software
The new tracking software will consist of many different components. The two most important will allow exchanges to verify cryptocurrency wallets and transactions for activities that suggest the bypassing of economic sanctions.
The smart contract, which should be particularly useful for DeFi projects, will verify whether a particular wallet address is on an index of economically sanctioned addresses. This inventory will be made publicly available.
In turn, the second component, the API, will use exactly the same information as the smart contract to verify if a particular address on the Blockchain network is not included in the publicly available list of excluded addresses. The API, due to its specificity, will be used not only within the new Chainalysis software but also elsewhere: on centralized cryptocurrency exchanges or mobile user interfaces.
Transparency as a priority
Chainalysis co-founder and CEO Michael Gronager stressed the importance of Blockchain network transparency in one of his public speeches. It makes it possible to minimize the risk of bypassing sanctions by affected entities. He also mentioned that his company has increased the pace of development of screening software and that it will be available completely free of charge.
He announced that Chainalysis would devote itself with even greater commitment than before to monitoring transactions made in the booming DeFi sector. Gronager pointed out that the lion’s share of decentralized cryptocurrency exchange protocols and platforms lack adequate security measures against the possibility of bypassing economic sanctions.
It’s hard not to agree with him: users of DeFi systems are guaranteed greater anonymity than participants of centralized exchanges, which is of considerable importance in the era of economic wars.