Chainalysis, the blockchain data platform, has announced the accelerated launch of two sanctions screening tools – an on-chain oracle and an API expected to launch next month – for the cryptocurrency industry free of charge.
As countries around the world continue to leverage economic sanctions in response to Russia’s invasion of Ukraine, decentralised web3 groups like DEXs, DeFi platforms, DAOs, and DApp developers are searching for lightweight tools to help them and their customers comply with sanctions policies.
These tools are designed to enable users to easily validate that they are not interacting with cryptocurrency wallets associated with sanctioned entities.
Given the transparency of blockchains, it would be difficult for the Russian government or financial elite to systematically evade sanctions at scale through cryptocurrency without detection. With the traditional financial system, some sanctioned Russian actors may attempt to use cryptocurrency as a means to evade sanctions. All of these transactions would be permanently recorded on the blockchain, providing opportunities to identify and shut down sanctions evasion tactics.
As seen with sanctions impositions in the past, cryptocurrency compliance professionals with the right data and technology are effective at identifying transactions by sanctioned entities and taking action, according to Michael Gronager, co-founder and CEO, Chainalysis.
“Now is the time for the industry to demonstrate that blockchains’ inherent transparency make cryptocurrency a powerful deterrent to sanctions evasion.