The New York State Department of Financial Services (NYDFS) reportedly recommended that crypto firms subjected to New York banking law employ blockchain analytics for tracing transactions.

Specifically, the regulatory entity reportedly shared its support for the move, claiming that “wallet addresses are typically pseudonymous, with nothing on the face of the transfer tying back to the originator, beneficiary, or underlying beneficial owners.”

As a result, per NYDFS, it is crucial that this particular class of companies utilizes blockchain analytics to steer clear of different illegal transactions, nominally money laundering or terrorism financing.

The agency additionally detailed three analytical processes that are able to provide assistance in fighting against such measures – augmenting Know Your Customer (KYC)-associated controls, carrying out transaction monitoring of on-chain activity, as well as sanctions screening of on-chain activity.

In a separate but simultaneous development, high-profile crypto exchange platform Coinbase reportedly also introduced a novel know-your-transaction (KYT) service, going by the name “Coinbase Intelligence”, to assist crypto entities in handling compliance-related problems. 

Per Coinbase, the freshly rolled out offering will reportedly operate as an API-type service, where businesses and institutions will be able to steer clear from regulatory risks on their own platforms. 

Features include real-time transaction monitoring automation for millions of transactions, via coming up with risk scores dedicated to addresses. Receiving alerts to activate proactive risk management should there be adjustments to risk profiles.

Simplified configuration of rule engines and unique risk insights into available third-party case management tools, along with screening transactions for anti-terror financing and other AML-related flags at scale.