The world’s largest custodian bank, Bank of New York Mellon, has teamed with blockchain software developer Chainalysis to track its users’ crypto transactions.
BNY Mellon has established a cooperation with Chainalysis, a blockchain-data platform, to assist track and evaluate bitcoin goods. BNY Mellon is the world’s largest custodian bank, with $46.7 trillion in assets under management.
Chainalysis is a blockchain-data analysis platform that provides services to traditional financial institutions, making it easier for large corporations to manage the legal issues associated with bitcoin. BNY will employ Chainalysis software to track, record, and utilise data related to crypto assets as part of the agreement.
KYT (Know Your Transaction), Reactor, and Kryptos are among Chainalysis’ risk management tools, the most notable of which is the KYT flagging system, which automatically determines whether bitcoin transfers are designated “high risk.”
If the KYT software detects crypto being sent to a sanctioned wallet address, it can stop the transaction ahead of time. Kryptos collects and converts complex data into useful information for institutions, while Reactor gives businesses more investigative capacity on the blockchain.
Caroline Butler, head of global custody, tax, and network management at BNY Mellon, spoke about the relationship and stressed the necessity of maintaining trust as the banks enter the world of digital assets:
“As the most trusted asset service provider, BNY Mellon enters the digital asset market with the designation of most trusted asset service provider. We are expanding our capabilities in the emerging cryptocurrency market by collaborating with Chainalysis and other major fintech organisations, and this is reflected in our products.”
Despite the fact that some privacy-conscious crypto users have criticised Chainalysis’ services, its capacity to provide crucial monitoring services to huge corporations helps legitimise the introduction of cryptocurrency into traditional finance.
In a statement, Chainalysis co-founder Jonathan Levin said, “Chainalysis has long thought that financial institutions are crucial to the overall growth and success of the cryptocurrency industry.”
BNY Mellon’s foray into cryptocurrency began in February of last year, when it revealed plans to act as an asset manager for its clients, holding, transferring, and issuing Bitcoin and other cryptocurrencies.
This is part of a bigger trend of traditional finance warming to the idea of cryptocurrencies, with household names like Morgan Stanley, Citibank, and JPMorgan now actively managing and investing in bitcoin.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.