Malta’s Financial Regulator Partners CipherTrace To Monitor Crypto Firms

Malta’s financial watchdog is in deal with blockchain security firm CipherTrace to monitor regulatory compliance of crypto-related business firms operating in the Republic of Malta, a cryptocurrency-friendly nation.

The Malta Financial Services Authority (MFSA) will use CipherTrace’s compliance monitoring solution to oversee and manage business risks of Malta’s licensed virtual asset businesses and cryptocurrencies.

Initially funded by the U.S. Department of Homeland Security (DHS) Science and Technology (S&T) and Defense Advanced Research Projects Agency (DARPA), CipherTrace is backed by leading Silicon Valley venture capital investors. It was created to develop cryptocurrency and blockchain tracing and security capabilities.

Leading exchanges, banks, investigators, regulators and digital asset businesses use CipherTrace to trace transaction flows and comply with regulatory anti-money laundering requirements, to promote trust in the cryptocurrency economy.

CipherTrace’s Supervisory Technology Tool will enable MFSA to better identify fraud and prevent money laundering and funding of terrorism. The tool will continuously rate the risks of cryptocurrency businesses to protect consumers, investors and business partners.

It tracks risk exposure of virtual asset businesses including cryptocurrency exchanges, collective investment schemes and initial coin offerings (ICOs) to gauge and measure potential exposure.

CipherTrace’s cryptocurrency anti-money laundering, cryptocurrency forensics and blockchain threat intelligence solutions will help MFSA to manage the risks associated with virtual asset businesses.

CipherTrace machine learning algorithms calculate risk levels for exchanges, addresses, wallets and other entities based on known associations, criminal addresses, and money laundering services.

Malta is welcoming cryptocurrency and blockchain businesses as the small Mediterranean island nation transforms itself into a fintech hub and a crypto-friendly “Blockchain island.”

Malta is actively building a supportive regulatory and technical infrastructure for Distributed Ledger Technology (DLTs), ICOs and virtual currencies aiming to become the world’s first blockchain-regulated state.

In July last year, the Maltese parliament passed three bills to set a regulatory framework and drive innovation in blockchain-like technologies. The government hopes these laws will attract foreign fintech companies to establish themselves in the country.

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