Chainalysis, a cryptocurrency compliance and investigations solution, announced in a press release Wednesday a collaboration with cryptocurrency exchange Binance. Chainalysis said it had completed "a global roll-out" of its compliance solution with Binance. This partnership aims to address hindrances related to cryptocurrencies, regulators, and traditional financial institutions.

"Cryptocurrency businesses of all sizes face the same core challenge: earning the trust of regulators, financial institutions and users. We expect many to follow Binance's lead to build world-class AML [anti-money laundering] compliance programs to satisfy regulators globally and build trust with major financial institutions," said Jonathan Levin, co-founder and chief operating officer of Chainalysis.

Chainalysis will provide Binance the access to its Know Your Transaction compliance software, enabling the exchange to monitor cryptocurrency transactions in real time. Chainalysis KYT uses pattern recognition, proprietary algorithms, and open source references to identify and categorize cryptocurrency services to raise live alerts on transactions involved in suspicious activity.

"By working with Chainalysis, we are able to continue building a foundational compliance program that enables the next phase of our growth. Our vision is to provide the infrastructure for a blockchain ecosystem and increase the freedom of money globally while adhering to regulatory mandates in the countries we serve,” said Wei Zhou, chief financial officer at Binance, the world’s biggest cryptocurrency exchange by trade volume.

Zhou hopes the outcome of this partnership will inspire the cryptocurrency industry to take anti-money laundering and anti-terrorism financing measures seriously. "The ultimate goal of our partnership with Chainalysis is to create an environment in blockchain where everyone feels safe. We believe the fight against money laundering to be collaborative and pro-active,” Zhou told CoinDesk.

In April, Chainalysis secured $16 million in funding to start Chainalysis KYT. Currently, It serves over 150 cryptocurrency businesses, financial institutions, and government agencies.

2018 has seen various well-known exchange platforms introduce additional compliance measures. In September, cryptocurrency exchange ShapeShift introduced a membership program that would gradually become mandatory and could include the provision of basic personal information (an additional feature to tackle money laundering).

A report published in October by cybersecurity firm CipherTrace found $927 million worth of cryptocurrencies were stolen by hackers from several exchanges in the first nine months of 2018. The report also showed that well-known cryptocurrency exchanges from various countries with weak anti-money laundering regulations had been used to launder $2.5 billion worth of bitcoins (in today's prices) since 2009. 

Allen and Overy LLP — an international law firm — published a report in May, titled "Cryptocurrency AML risk considerations", asserting that the essential gatekeepers in global AML regime are know your customer and customer identification procedures. The report also said: "Despite calls for the adoption of global AML standards for cryptocurrency trading, no such uniform rules have yet emerged."

The law firm's report also noted that the Financial Asset Task Force, an inter-governmental organization, had directed that cryptocurrency payment service providers should be subject to the same obligations as their non-crypto counterparts. The majority of jurisdictions that have issued rules on the matter have also concluded that the commercial exchange of cryptocurrency for fiat currency should be subject to AML obligations.