In light of global trade restrictions against Russia, Chainalysis has introduced two new tools to help companies ensure they do not interact with sanctioned entities via blockchain.
Application of sanctions in Crypto
The first of these tools, according to a company statement, is a chain oracle. The smart contract will store data from economic embargo lists provided by various Western authorities such as the US, the EU or the United Nations. The oracle can be easily called by other smart contracts to validate any blockchain wallet before interacting with it. This tool was released yesterday.
The second tool, an API tool for web/mobile user interfaces, will get the same data to validate wallets and is expected to be released next month.
Chainalysis made clear its support for Ukraine over Russia in the recent conflict, emphasizing the need for the crypto industry to be on “the right side.” As such, their new tools are free to use.
“These innovations are available to both good guys and bad guys,” the company said regarding blockchain technology. “While the industry celebrates the successful fundraising of the Ukrainian government, we have also heard concerns about the potential for cryptocurrencies to be used by sanctioned entities and individuals in Russia to evade sanctions.”
The tools are specifically targeted at web 3 applications like decentralized exchanges, which “do not have the lightweight solutions they need to comply with sanctions policies.”
In fact, KYC and AML requirements may soon be coming to the Defi world. As part of Avalanche’s recent incentive program, it plans to create an integrated subnet with KYC functionality.
Crypto: Helping Ukraine or Russia?
Cryptocurrencies facilitate long-distance peer-to-peer transactions. This has made them effective for international fundraising campaigns ranging from Canada’s Trucker Convoy to Ukraine’s Military Defense.
However, concern is growing among politicians that the Russians could also use them to get around trade restrictions. This has prompted extreme calls for crypto exchanges to stop servicing all Russian accounts, which the companies were hesitant to follow through on.
However, when exchanges have been legally required to sanction specific entities, they have complied. Other industry players, such as the Ethereum mining pool “Flexpool”, have individually decided to stop serving Russia.
In general, the crypto community has been quite generous with its support for Ukraine, which has received tens of millions of dollars worth of Bitcoin, Ether, Dogecoin, and more.
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This post Chainalysis Unveils Free Sanctions Screening Tools for the Crypto Industry
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