The analytics firm Chainalysis announced the launch of two new free tools to identify sanction-linked crypto wallets.
We’re excited to announce the launch of two sanctions screening tools – an API and an on-chain oracle available free of charge!
These lightweight tools will help DEXs, #DeFi, #DAOs, and DApp devs comply with sanctions policies.https://t.co/8kCIOT7DnY
— Chainalysis (@chainalysis) March 10, 2022
The firm noted that cryptocurrencies helped authorities and Ukrainian charities raise tens of millions of dollars. However, digital assets can also be used to circumvent sanctions.
“While the industry celebrates the successful fundraising for the Ukrainian government, we also heard concerns about the possible use of cryptocurrencies by sanctioned individuals and entities in Russia to evade restrictions,” Chainalysis said.
Traditional financial institutions, major crypto firms and centralized exchanges typically have transaction monitoring and regulatory-compliance solutions. Chainalysis’s new tools are primarily intended for decentralized protocols, including DEX, DeFi platforms, DAO and dapps.
Solutions that allow them to check whether a crypto address is on a sanctions list include:
- API for mobile apps and websites;
- on-chain oracle for use in smart contracts.
Launch of the API is scheduled for around April. The oracle has already been deployed in most networks supporting the EVM, such as Ethereum, Avalanche, BSC, Polygon, Optimism, Arbitrum and Celo.
Experts were skeptical about Russia’s ability to evade financial sanctions via cryptocurrencies. However, Elliptic researchers noted that the country could partially circumvent restrictions through mining and hackers.