More and more companies are choosing to accept blockchain-based currencies, such as Bitcoin, as a means of payment. However, digital currency can be a challenge for the banks to facilitate, as they have to be able to document that the money complies with legislation and has not, for example, been used in connection with criminal activities.
This can be a particular problem among fintech start-ups, where digital currencies are more strongly represented than in more traditional companies. These start-ups can face a challenge when it comes to finding a bank that is capable, in terms of risk, of facilitating digital currency payments.
Bitcoin is used all over the world – sometimes for criminal transactions, too. Chainalysis has been very successful in helping investigatory authorities worldwide in analysing Bitcoin payments to validate whether they comply with anti-money-laundering legislation.
“Collaborating with Nets in this way gives us a sound platform from which to extend our tools to the Nordic banks. Many of them are keen to be able to have their customers’ Bitcoin transactions validated,” according to Michael Grønager, co-founder and CEO of Chainalysis.
“Several of our customers among the Nordic banks have been looking for an effective tool to assist them in complying with legislation. In fact, I believe many banks have held back on facilitating Bitcoin payments because they didn’t have the tool we are now able to offer them,” Nets’ Head of Fraud & Dispute Services Kati Rintala comments.
Digital currencies such as Bitcoin carry a lot of history with them every time they are transacted, as data is stored in the blockchain. This is comparable to the ability to trace the serial number of a bank note and view previous transactions involving it. Therefore, with the right tools, it is possible to analyse what types of transactions have previously been completed using the currency in question.
Chainalysis’ analysis tool will become part of the Nets Fraud & Disputes Services portfolio to help banks discover and identify fraudulent payments.