Chainalysis has launched two sanctions-screening tools in an effort to provide a greater level of regulatory oversight to crypto exchanges and DeFi projects. This coincides with G7 countries announcing that they will ensure that the Kremlin and its elites, proxies, and oligarchs cannot leverage digital assets to evade international sanctions.
Chainalysis’s screening tools, an on-chain oracle, and an API, use tracking software that assists exchanges in scrutinizing digital wallets and transactions. These tools are available free of cost. It will help DeFi, DEXs, DApps, and DAOs to comply with sanction policies. Chainalysis has described the oracle as a smart contract that can be called from other smart contracts to validate a wallet before allowing interaction with the second contract. The API, on the other hand, can be utilized on a broader variety of applications, including centralized crypto exchanges and mobile user interfaces.
The tools make it easier, simple, and quick to see whether the crypto addresses are on the US’s UN’s or EU’s economic or trade embargo lists. It can also be used to check whether the addresses are prohibited from dealing in certain jurisdictions.
Michael Gronager, the co-founder and CEO of Chainalysis, highlighted that the industry should show that blockchain’s inherent transparency makes cryptocurrency a powerful deterrent to sanctions evasion. He said that Chainalysis has prioritized the development of these tools for crypto market participants to harness transparency. They can take advantage of these basic sanctions screening at no cost.
Countries across the world have taken to sanctions to stand up against Russia’s invasion of Ukraine. The European Union, UK, United States, and allies continue to impose crippling sanctions on elements of Russia’s economic and trading activities.