Elliptic To Provide Crypto Surveillance Tools To LocalBitcoins
- The peer-to-peer exchange will now make use of Elliptic’s Navigator risk analysis and Lens wallet screening tools.
- With these new tools, the exchange is trying to get rid of its reputation as one of the top destinations for dirty Bitcoin.
Elliptic founder and CTO James Smith. CoinDesk
Analytics company Elliptic is partnering with peer-to-peer exchange LocalBitcoins in order to provide it with its blockchain-tracing tools, the firm said in a press release on 28 July.
According to the announcement, the Helsinki-based platform will make use of Elliptic’s Navigator risk analysis and Lens wallet screening tools to crack down on illicit crypto activity on the exchange. By introducing these tools, the exchange is attempting to automate its compliance and anti-fraud processes, while at the same time reducing risk.
The CEO of LocalBitcoins, Sebastian Sonntag, said in a statement:
“We are pleased to be partnering with the global leader in blockchain monitoring. Elliptic will enable us to achieve the highest levels of compliance while increasing operational efficiency and reducing costs. We will continue to invest heavily in AML and KYC to maintain a secure and trusted platform for our valued customers.”
The introduction of the transaction monitoring software will tackle one more problem for the exchange. According to blockchain analysis firm CipherTrace, LocalBitcoins has been one of the top destinations for dirty Bitcoins for quite a while now. Earlier this year the firm released a report, which showed that, while Finnish exchanges received 12.01% of all crypto associated with criminal activity in 2019, LocalBitcoins accounted for 99% of those funds.
Elliptic’s Chief Scientist, Tom Robinson, said in a statement:
“By choosing Elliptic, LocalBitcoins have demonstrated their commitment to eliminating illicit use of their platform. Like the rest of the crypto industry, peer-to-peer crypto exchanges have made huge strides in adapting to the new regulatory environment by introducing more stringent, technology-enabled anti-money laundering controls. Our data shows this has led to a 50% reduction in the volume of cryptoassets moving from dark markets to peer-to-peer exchanges.”
LocalBitcoins has been working diligently on its Anti-Money Laundering (AML) safeguards for a while now, in order to respond to Europe’s AMLD5 legal framework, and the new tough Finnish business regulations. Back in 2019, in response to the new regulations, the peer-to-peer exchange abandoned its practice of cash-for-crypto trading, and later introduced a new mandatory identity verification system.
- The peer-to-peer BTC trading platform decided to close down its services as it was unable to overcome challenges during the “ongoing very cold crypto-winter”.
- LocalBitcoins will suspend its trading services on 16 February, and give its users 12 months to withdraw all their assets from the platform before it is completely shut down.
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- Raised in a Series C funding round, the investment will help the company expand its global team of experts, and accelerate its research and development.
- The $60 million funding round was led by Evolution Equity Partners, and also saw participation from the Softbank Vision Fund 2.
- Paysafe will implement Elliptic Lens to manage exposure to crypto-related risks.
- The compliance solution will be integrated into Paysafe’s proprietary AI-powered risk engine.