Chainalysis, a leading blockchain analytics and security company, has teamed up with Paxful, a major peer-to-peer (P2P) digital asset exchange. The partnership involves Chainalysis helping Paxful with enhancing its compliance and KYC processes.
Paxful will reportedly be using Chainalysis’ know your transaction (KYT) and “reactor” software tools to identify and look closely into potentially high-risk Bitcoin (BTC) transactions.
This marks the first time that Chainalysis is partnering and working directly with a P2P digital asset trading platform.
A Chainalysis representative stated:
“Paxful, which accounts for around 25% of all P2P cryptocurrency activity, is currently the only P2P exchange Chainalysis currently works with. We are open to talking to other P2P exchanges [on a case-by-case basis].”
Chainalysis had previously argued that all P2P digital currency trading platforms were “inherently risky,” as the majority of them are decentralized and don’t need users to open accounts in a compliant manner.
Paxful’s management noted that it has made substantial investments into improving its existing compliance procedures. The exchange says it is using many software tools to track Bitcoin transactions.
The Paxful team said they aim to “keep the marketplace free from fraud and scammers.”
Paxful has now joined other established digital asset exchanges that presently use Chainalysis’ tools to identify suspicious and potentially fraudulent transactions. Chainalysis works with Bitfinex, Binance, and Bittrex.