Chainalysis announced that BNY Mellon will use its cryptocurrency compliance solution as part of the bank’s integrated solution for traditional and digital asset custody. The bank announced plans for the solution in February last year.
BNY Mellon is the first systemic bank to adopt Chainalysis offering. The startup has raised more than $350 million in funding, including from another major bank, MUFG. Its most recent valuation was $4.2 billion in its June 2021 Series E round.
Chainalysis is known to have several customers that are regulators or law enforcement. These include the United Nations Office on Drugs and Crime (UNODC) and EUROPOL. According to a Bitcoin.com report, a rogue employee revealed contracts in the United States with Homeland Security, the FBI, IRS, ATF, DEA, SEC, Secret Service, CIA (through In Q Tel), NYPD and other large police departments.
“BNY Mellon enters the digital asset market as the most trusted asset servicer in the space,” said Caroline Butler, Global Head of Custody, Tax and Network Management for BNY Mellon. “Working with Chainalysis and other leading fintech providers is foundational to our role as a trusted innovator and the extension of our capabilities into products that serve the growing cryptocurrency market.”
Chainalysis offerings include ‘know your transaction’ KYT, which enables organizations to detect patterns that are high risk and provides intelligence on the source and destination of funds. If a transaction looks odd, it’s possible to connect the pseudonymous blockchain identifiers with real-world organizations through Chainalysis’ investigative tools.
In addition to transactions, it provides data about specific cryptocurrency entities such as exchanges and their on-chain activities.
Meanwhile, BNY Mellon chose Fireblocks for its digital asset custody technology solution. It’s also involved in a wide range of enterprise blockchain solutions, including Fnality, the interbank settlement solution that uses central bank deposits, collateral management solution HQLAX, and trade finance. It’s also been involved with various pilots with Vanguard and Symbiont for asset backed securities and foreign exchange forwards.