The Malta Financial Services Authority (MFSA), the single regulator of financial services on the island, has partnered with CipherTrace to implement a cryptocurrency intelligence solution to regulate virtual asset businesses. CipherTrace was created to develop cryptocurrency and blockchain tracing and security capabilities.
The firm will keep track of all transactions that pass through local Maltese crypto exchanges and digital wallets to screen for any money laundering and terrorism financing. They will also screen all ICOs. The technology tool, called Compliance Monitoring, uses machine learning to de-anonymize transactions, which helps regulators evaluate and monitor the trustworthiness of virtual asset businesses. This aims to protect consumers, investors and business partners.
“Being strongly aware of the money laundering and financing of terrorism risks associated with entities operating in this sphere, the decision has been taken to engage the services of CipherTrace in order to reduce fraud and detect transactions with illegal sources of funds,” said Joseph Cuschieri, CEO of the MFSA. “CipherTrace Compliance Monitoring will provide the MFSA with powerful oversight tools to automate regulatory processes and audit the risk management of virtual asset businesses that are licensed in Malta.”
Technology Helps To Decide Which Virtual Asset Businesses Are Trustworthy
The International Monetary Fund, or IMF, has claimed that the growth of Cryptocurrency in Malta has created significant risks of money laundering and terrorist financing in the island’s economy. As we reported last week, dozens of crypto companies who have moved to Malta have been finding it difficult to open bank accounts.
Dave Jevans, CipherTrace CEO said that the SupTech will allow the MFSA to monitor activities of crypto businesses in both the pre and post-authorisation stages. “Cryptocurrency businesses often have difficulty establishing trust and maintaining banking relationships because of their perceived risk”.
“Banks and other financial institutions use the CipherTrace Compliance Monitoring solution to help decide which virtual asset businesses to trust as corporate customers,” he added. “These insights help banks avoid de-risking by turning away valuable customers in this lucrative and fast growing sector”.