Robinhood joins Chainalysis for crypto wallet launch

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In preparation for the rollout of its crypto wallet, Robinhood is integrating analysis tools from leading crypto intelligence firm Chainalysis, according to an announcement shared with The Block.

Currently, Robinhood provides users with exposure to the price movements of various cryptocurrencies on its brokerage app, which also offers more traditional stock trading. However, users cannot withdraw or deposit off-platform crypto.

In September, Robinhood announced its intention to change that and allow users to move tokens as they could on a crypto exchange like Coinbase or Kraken. This is primarily a regulatory challenge, as expectations of such a widely used platform to protect against money laundering are quite high.

“The leadership team has spent significant resources and capital to embed this principle at all levels of the organization,” Ben Einstein, Robinhood Crypto’s head of partnerships, said in a statement. “Chainalysis works closely with regulators and law enforcement to develop industry best practices and this approach is aligned with Robinhood’s commitment to work with policy makers in a collaborative manner.

Specifically, Robinhood will use Chainalysis KYT and Chainalysis Reactor. The former reports risky transactions in real time, noting wallet addresses that have previously been associated with illicit activity. The latter visualizes chains of transactions, which is useful for due diligence checks.

It was not until December 9 that Robinhood Crypto announced the conclusion of the alpha program for its crypto wallets. Starting in January, it will bring users into beta testing, for which the company says 1.6 million users are on a waiting list.

Despite interest in its upcoming crypto wallets, Robinhood has been going through a rough patch in the markets. HOOD shares were priced at $ 34 when it went public in July, quickly peaking at $ 80. By the end of trading on Friday, December 10, its shares had fallen below $ 22.

Source: NASDAQ

Chainalysis is one of the oldest companies working on blockchain analysis and is in many ways the go-to entrepreneur for U.S. government agencies looking to investigate cryptocurrency transactions.

As this has become a larger mission over time and especially since the upsurge in high profile ransomware attacks earlier this year, analytics companies have seen their funding increase. Chainalysis, in particular, took advantage of this, ending a fundraising round this summer valuing the company at more than $ 4 billion.

Along with the wave of fundraising from more established blockchain investigators, a number of new players have entered the market.

© 2021 The Block Crypto, Inc. All rights reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial or other advice.

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