29.10.2020

CipherTrace Launches A New Product to Help Banks Eliminate “Blind Spots”

For Bitcoin (BTC) to gain wider adoption within the mainstream economy, it will be pressured to conform to the mainstream regulation, which will elicit the wrath of privacy advocates like Antonopoulos. Only time will tell which side of the debate will prevail.


April 28, CipherTrace launches Armada, a product designed to eliminate risky cryptocurrency blind spots for banks and financial institutions.

Unlike other products by CipherTrace and many similar products by its competitors, Armada focuses on the off-chain data instead of on-chain data. It can work in tandem with banks’ existing monitoring tools:

“To identify transactions with virtual asset service providers (VASPs), including those with weak KYC or operating as unregistered money service businesses (MSBs).”

The press release further says that with the release of Armada, CipherTrace aims to provide:

“Critical visibility into risky cryptocurrency blind spots so know your customer (KYC) processes can detect and perform due diligence on virtual asset service providers (VASPs).”

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In a statement to Cointelegraph, John Jefferies, chief financial analyst for CipherTrace, emphasized that his company has the most accurate data:

“CipherTrace has the most accurate data attribution coverage tying real-world entities to crypto addresses, enabling Armada to link banking data and billing descriptors to entities, which is a big differentiator from competitors because it is critical for transaction matching.”

According to the company’s press release, Armada can conduct KYC to determine VASPs and unregistered MSBs, enable “enhanced due diligence of high-risk virtual asset payments,” and discover counterparty risk associated with hundreds of such businesses. CipherTrace’s database contains over 500 businesses involved in virtual asset transactions.

Jefferies elaborated on how CipherTrace defines “high-risk virtual payments”:

“Risky entities include sanctioned entities, known criminal activities and thefts, dark markets, higher-risk exchanges, HYIP scams, malware, ransomware, and mixers.”

CipherTrace works against dictators

This news comes days after Andreas Antonopoulos accused companies like CipherTrace of helping: “The world’s worst dictators and regimes, either directly or indirectly, with information that violates the civil rights of millions of people.”

Responding to Antonopoulos’ accusations, Jefferies stated that CiptherTrace’s products aim to disrupt dictators and oppressive regimes:

“CipherTrace helps banks and other financial institutions comply with international sanctions, anti-terrorist financing regulations, and AML standards. This type of work is what prevents dictators and oppressive regimes from continuing to fund weapons programs and other destructive enterprises.”

Chinese Official Warns Libra Could Abet Illegal Cross-Border Transfers

Libra must abide by international foreign exchange regulations or “it should be banned,” a senior Chinese regulator said Monday.

Sun Tianqi, chief accountant of China’s State Administration of Foreign Exchange (SAFE), made the comments in an address to the Bund Summit in Shanghai, according to report by Reuters.

Sun called upon emerging market governments to consider curbing Libra’s advance, especially if the stablecoin project would threaten a state’s capital controls or enable illegal transfers.

“Financial technology can promote the opening up, innovation and development of a country’s financial market,” said Sun, “but it could also bring a lot of illegal cross-border financial activities. This should be a matter of great concern to all countries, especially emerging markets.”

Sun’s concern lies with a foreign digital currency supplanting the yuan in domestic transactions, which would limit the state’s ability to enforce capital controls and foreign exchange management. Currently, the People’s Bank of China (PBoC) exerts downward pressure on the yuan, weakening it against other major currencies in order to boost exports.

The comments are in line with public statements from other Chinese regulatory officials on the controversial Facebook-led initiative.

In July, former governor of the People’s Bank of China Zhou Xiaochuan said Libra poses a threat to payments systems and national currencies. Wang Xin, head of the research bureau at the PBoC, said Facebook’s venture has spurred development of China’s “digital yuan,” initially proposed in 2014.

On Friday, President Xi said to “seize the opportunity” afforded by blockchain. A recent registration list published by the Cyberspace Administration of China, shows that development of blockchain applications in China is advancing quickly, with more than 500 enterprise projects already underway.

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