As more people start to dip their toes into the cryptocurrency waters, two companies are making it their goal to curb nefarious uses of the digital currency.
Elliptic, a blockchain intelligence firm, is collaborating with LexisNexis Risk Solutions to bring into market a bank-grade risk management to digital currency like bitcoin.
LexisNexis is known for providing traditional banks with anti-money laundering risk management data, and this is what Elliptic is looking to tap into to boost its bitcoin transaction monitoring and compliance products.
Together, the two developed a service that they said will help financial services firms sniff out suspicious transactions, especially from those heightened-risk people or groups that are on global watch lists.
“This is a step towards making it (bitcoin) more mainstream and more acceptable,” LexisNexis’s Thomas Brown told Reuters.
Bitcoin, as we all know, is popular for its complex algorithms that allow users to anonymously move around money quickly without a need for a central authority to process transactions. Bitcoin’s underlying technology—blockchain—has made it attractive to a variety of users, including those who want a currency that is free from government control.
The digital currency, however, has also become the currency of choice on the dark side of the Internet.
“Today, if you see bitcoins transacting, you almost assume they’re from someone who wants to be off the grid, or they’re proceeds from illicit transactions,” Brown said.
Elliptic and LexisNexis’s product isn’t the first attempt to mitigate the risks of the popular digital currency being used for disreputable activities. The European Union, for instance, is looking to establish a central database that will have records of bitcoin and virtual currency users’ identities and wallet addresses, which will be accessible to financial intelligence units of member countries.
Current bitcoin price and transaction volume
Speaking of reprehensible acts, the recent attack on Hong Kong-based bitcoin exchange Bitfinex has caused bitcoin to sink further.
Bitcoin traded at $572.17 on Thursday, with a market capitalization of close to $8.91 billion.