P2P cryptocurrency exchange Paxful partnered with surveillance corporation Chainalysis to “monitor large volumes of cryptocurrency activity and identify high risk transactions on a continuous basis.” The following is an excerpt from the opening paragraph of the press release from Chainalysis:
Paxful uses Chainalysis KYT (Know Your Transaction) to monitor its platform’s cryptocurrency transactions in real-time and Chainalysis Reactor to build investigations when it detects suspicious activity. Together, these tools amplify Paxful’s compliance expertise and sets a new compliance benchmark for P2P cryptocurrency exchanges globally.
The press release went on to explain how Chainalysis does consider P2P exchanges “inherently risky” due to the greater levels of decentralization and privacy they offer, but changed that evaluation for Paxful once Paxful integrated with Chainalysis products:
Previously, Chainalysis considered all P2P cryptocurrency exchanges as inherently risky and labelled them as such in its products because most are decentralized and oftentimes don’t even require users to set up an account. Paxful, however, set a new precedent for P2P exchanges by focusing on top-notch compliance and Know Your Customer (KYC) standards, driving Chainalysis to evolve its policy and evaluate P2P exchanges on a case-by-case basis before labeling them as risky, just as it does for other cryptocurrency exchanges.