BNY Mellon to utilize Chainalysis software to monitor user transactions

The Bank of New York Mellon will be partnering with Chainalysis to facilitate the tracking of user transactions. Chainalysis is a blockchain analytics platform that provides services to traditional financial institutions that want to venture into the cryptocurrency sector.

BNY Mellon is the largest custodian bank globally. The institution manages around $46.7 trillion worth of assets.

BNY Mellon to utilize Chainalysis software

Through this partnership, BNY Mellon will use the software provided by Chainalysis to track, record and utilize data related to cryptocurrency assets. The custodian bank will benefit from some of the features offered by Chainalysis.

These features are Know-Your-Transaction (KYT), Reactor and Kryptos. KYT will be at the top of the beneficial features for BNY Mellon because it will analyze transactions based on their level of risk.

KYT also ensures that cryptocurrencies cannot be transferred to sanctioned wallet addresses. Reactor empowers institutions with investigative abilities regarding blockchain, while Kryptos will convert complex information to comprehensible information.

“At BNY Mellon, we enter the digital asset market with the title of the most trusted asset service provider. Working with Chainalysis and other leading fintech companies, we are developing our capabilities in the growing cryptocurrency industry and reflecting this in our products,” said Caroline Butler, the head of global custody, tax and network management.

Role of Chainalysis in the traditional finance sector

Chainalysis has partnered with several traditional financial institutions that have ventured into the crypto sector. However, these partnerships have been criticized for failing to protect user privacy, a major characteristic of the crypto sector.

Traditional financial institutions venturing into crypto focus on legitimacy, making partnerships with analytics and tracking firms such as Chainalysis necessary.

The co-founder of Chainalysis, Jonathan Levin, noted

Chainalysis has always believed that financial institutions are critical to the overall growth and success of the cryptocurrency industry.

BNY Mellon is not the only major financial institution in the US to venture towards cryptocurrencies. Some of the other notable names on Wall Street that have ventured towards crypto include Morgan Stanley, Citibank and JPMorgan. These banks are actively invested in cryptocurrencies.

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