How Binance Will Integrate “Compliance Tools” For Custody
Per a press release shared with Bitcoinist, Binance will integrate a new compliance mechanism for its custody solution. Provided by TRM Labs, the integration will allow Binance Custody to access risk management, compliance, and “intelligence” technology to monitor funds and transactions from its customer.
In the release, Binance claims that this cooperation aims to remove the risk and increase security across its ecosystem. Institutions will allegedly feel more secure in onboarding the crypto space, potentially pushing the sector “to new heights.”
Cathy Yu, Head of Binance Custody, claims that the company is trying to improve its security to allow large investors and institutions to dab into cryptocurrency and digital assets. The partnership will TRM Labs will “ensure” the “full protection” of the customers’ assets. Yu added:
As an institutional custodian, our utmost priority is to provide secure and compliant services that our clients can trust. Utilizing TRM’s compliance and risk management solutions strengthens our suite of secure custody solutions to help clients safely participate in this rapidly growing digital economy.
Binance Joins Forces With TRM Labs To Counter Crypto Hacks
Bitcoinist reported that the crypto industry had seen a spike in criminal activity. Data from Chainalysis claims that 2022 has been one of the worst years for the sector regarding hacks and stolen funds.
Bad actors managed to steal over $3 billion in funds from crypto projects and decentralized finance (DeFi) protocols. The on-chain analytics firm predicts an extension of this trend, making 2022 the worst year for crypto security with a record of 125 hacks.
1/ After four hacks yesterday, October is now the biggest month in the biggest year ever for hacking activity, with more than half the month still to go. So far this month, $718 million has been stolen from #DeFi protocols across 11 different hacks. pic.twitter.com/emz36f6gpK
— Chainalysis (@chainalysis) October 12, 2022
The Binance Custody and TRM Labs partnership will mitigate these risks on the entire Binance ecosystem, the release claims. TRM Co-Founder and CEO Esteban Castaño said the following on their newest collaboration:
As mainstream adoption of digital assets progresses, it is vital that institutions have compliance peace-of-mind when choosing partners such as custody service providers. By incorporating TRM’s suite of compliance and risk mitigation tools, Binance Custody reinforces that security and safety are key aspects of the value they seek to bring to customers.
Why TRM Labs Is A Controversial Partner
The release emphasized the features and the tools that will become available for Binance. These tools will allow the custody solution to improve compliance with international anti-money laundering regulations and “manage exposure to risks such as sanctions, hacked or stolen funds, and terrorist financing.”
The integration with TRM will enable Binance Custody, a solution “seemingly integrated with the Binance ecosystem,” to screen for “high-risk wallets” and monitor “suspicious transactions.” In addition, the custody solution will be able to track in real-time any crypto transactions for AML compliance and create “on-chain risk profiles” for digital asset business.
TRM Labs has been gaining a lot of attention in the crypto space. After the U.S. Department of Treasury imposed sanctions on Tornado Cash, some DeFi protocols implemented TRM Labs tools to screen and block wallets interacting with that platform.
Some users were censored and blocked from these platforms due to this process for receiving funds tied to Tornado Cash. Overall, some crypto users believe that TRM Labs and compliance tools might lead to more censorship in the nascent space.