KuCoin looks to prevent money laundering by partnering with Chainalysis


The crypto industry has seen a massive growth of illicit activities like hacks and scams over the past few years. Reportedly, $4.3 billion was lost to crypto scams in 2019, with the majority of funds coming from Ponzi schemes. Most of these funds are then liquidated via crypto exchanges and are lost forever.

Trying to address growing concerns about money laundering, exchanges are now implementing various measures to track and intercept these funds. The latest to make a move is Hong Kong based crypto exchange Kucoin, with its partnership with blockchain analysis firm Chainalysis.

The IDG-backed exchange known for the array of cryptocurrency trading tools and services available for its users will work with Chainalysis to bolster KuCoin’s unyielding commitment to user safety and compliance-first business practices.

Chainalysis provides tools to fight money laundering

As per the announcement, KuCoin will utilize Chainalysis Know-Your-Transaction (KYT) software to track and prohibit money laundering and illicit activities in real-time. Furthermore, it will also use the Chainalysis reactor tool to investigate the suspicious behaviour of user accounts.

Jason Bonds, Chief Revenue Officer for Chainalysis commented:

“Chainalysis is thrilled to partner with exchanges like KuCoin that prioritize compliance and the safety of its users. Our relationship with KuCoin is also an example of our continued commitment to working with leading exchanges in the Asia Pacific region, an important hub of cryptocurrency activity.”

Chainalysis KYT is a tool that allows compliance teams to monitor large volumes of cryptocurrency transactions and identify those that pose high risks by continually applying global Anti-Money Laundering (AML) standards to each transaction across all users within an organization’s user base.

Commenting on the development, Johnny Lyu, CEO, KuCoin Global, said:

“We teamed up with Chainalysis to create a safe and compliant trading environment. Through KuCoin’s efforts, the crypto world will combat illegal activities, such as laundering money and financing terrorism.”

Besides the partnership with Chainalysis, the exchange has also developed its own fraud monitoring system that is designed to identify “early warnings of abnormal behaviour” to prevent illicit activities.

As previously reported by The Daily Chain, the Huobi group also launched its on-chain analytics tool back in April this year. According to a company press release, the new on-chain analytics tool flags abnormal transactions in real-time suspends accounts and then conducts a follow-up investigation.

Chainalysis had previously reported that $2.8 billion in illicit Bitcoin was laundered via cryptocurrency exchanges in 2019 itself. Over 50 percent ($1.4B) of these funds were washed through major trading platforms Binance and Huobi.

Anna Larsen
Anna Larsen has been a Crypto enthusiast since 2016. Fascinated by the technology and its usecases she decided to pursue a career in content creation related to this space. The journey has been exciting ever since.

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