LocalBitcoins Enhances Security With Elliptic’s Blockchain Monitoring Tools
Peer-to-peer (P2P) cryptocurrency exchange LocalBitcoins has further enhanced its compliance by adopting Elliptic’s blockchain monitoring solutions.
The Finland-based exchange now employs Elliptic’s software to shield against the illegal use of its platform and comply with the EU’s fifth anti-money laundering directive (AMLD5). LocalBitcoins is the platform which frequently receives criminal funds, according to a recent analysis from CipherTrace.
LocalBitcoins has now essentially automated its compliance process with Elliptic tools as it doesn’t need to manually perform customer due diligence and report suspicious transactions. The automation helps save time and money, according to Elliptic’s co-founder and chief scientist Tom Robinson.
LocalBitcoins’ move comes after its know-your-customer (KYC) measures, implemented in October, which seems to have impacted its market share. Last month, LocalBitcoins rival Paxful outperformed it in weekly global trading volume for the first time. LocalBitcoins saw trading volumes of over $39.5 million for the week that ended June 6, while Paxful reached volumes of almost $39.8 million.
LocalBitcoins recently announced that the KYC measures helped it reduce transactions from darknet markets by almost 70% between September 2019 and May 2020.
Notably, Paxful also uses blockchain monitoring tools from Chainalysis, since March of this year, to detect and investigate high-risk crypto transactions.
Elliptic’s Robinson stated that the company works with “a number of P2P crypto exchanges” and is in “active discussions” with several others. Robinson declined to disclose names of those exchanges.