Home » Blockchain NYDFS calls for crypto firms to use blockchain analytics Blockchain Reading 2 min Views 1 The regulatory agency asked crypto firms to adopt methods to ensure greater risk assessment for potentially problematic transactions. In a letter published on Thursday, the New York State Department of Financial Services, or NYDFS, recommended that all digital currency companies operating under New York banking law adopt blockchain analytics to trace transactions. In supporting the decision, the regulatory agency wrote: “Wallet addresses are typically pseudonymous, with nothing on the face of the transfer tying back to the originator, beneficiary, or underlying beneficial owners.” Therefore, as told by NYDFS, it is vital that such classes of firms use blockchain analytics to prevent illicit transactions, such as money laundering or terrorism financing. The agency also outlined three analytical processes that can help combat such measures. These include augmenting Know Your Customer (KYC) related controls, conducting transaction monitoring of on-chain activity and conducting sanctions screening of on-chain activity. Separately on the same day, cryptocurrency exchange Coinbase announced that it was rolling out a novel Know Your Transaction (KYT) service, dubbed “Coinbase Intelligence,” to help cryptocurrency firms deal with compliance issues. As told by Coinbase, it is an application programming interface-type service that businesses and institutions can use to mitigate regulatory risks on their own platforms. Features include: Automating real-time transaction monitoring for millions of transactions by generating risk scores for addresses. Receiving alerts to enable proactive risk management if there are changes to risk profiles. Easily configuring rule engines and unique risk insights into existing third-party case management tools. Screening transactions for anti-terror financing and other Anti-Money Laundering- (AML)-related flags at scale. Meanwhile, Coinbase Analytics has been rebranded to Coinbase Tracer to visualize the flow of funds using public attribution data to reduce fraud, demystify counterparty risk and help flag Anti-Money Laundering risks with risk scores and alerts.