In separate announcements, the Algorand and Tezos Foundations claimed to have partnered with two analysis companies, Chainalysis and Coinfirm, respectively, to help ensure regulatory compliance in their blockchains.
Almost a year has passed since the Financial Action Task Force (FATF), the international anti-money laundering guarantor (AML), updated its guide for cryptocurrency companies, which now have to store and disclose information about senders and recipients above of a certain transaction threshold.
The new plans of Algorand and Tezos
In the case of Algorand, Chainalysis will provide a Know-Your-Transaction (KYT) solution, allowing the foundation to monitor large volumes of on-chain assets for the native ALGO token and report any suspicious transactions to the authorities.
In a statement, Fangfang Chen, chief operating officer of the Algorand Foundation, said that the collaboration would meet Singapore's regulatory requirements. "We needed a compliance partner who could not only help us adhere to the Singapore regulations where we are based, but also to the best global regulatory practices," he said.
Over the past 12 months, some national regulators have integrated the FATF Travel Rule into local legislation. The U.S. financial crime control network (FinCEN), one of the first regulators to apply the Travel Rule in May 2019, has maintained a minimum threshold of $ 3.000.
Singapore announced in January that parties involved in cryptographic transactions worth more than 1.500 Singapore dollars (approximately US $ 1.100) should be ready to reveal identity.
Tezos' relationship with Coinfirm is broader, allowing for its foundation and commercial entities such as the exchange Bitcoin Pro to monitor assets on the protocol. In general, however, Tezos will deal with Coinfirm along the same lines as the integration of Chainalysis in Algorand.
"AML has become a necessary feature for protocols and related resources that desire a market leadership position and the ability to operate in regulated markets globally," reads a press release.
The new AML rules have made the crypto sector more attractive to institutional clients
Travel Rule was initially greeted with trepidation. Many in the industry were concerned that it could mean the end of cryptocurrency transactions, compromising user privacy and making the burden of compliance on exchanges and other companies too expensive.
But although there have been some negative effects, such as the exchange Deribit which was expelled from the Netherlands, there is no shortage of positive implications for the sector: the second largest German exchange, Boerse Stuttgart, said that the strict AML rules made attractive encryption for a growing institutional audience.
And it is not only Tezos and Algorand that conforms to the FATF. A year later, and with the Travel Rule now absorbed into local laws, the cryptocurrency industry appears to be adapting to the new regulatory landscape.
