Malta Appoints Ciphertrace to Keep an Eye on Crypto Transactions



Ciphertrace Malta

The Malta Financial Services Authority (MFSA) has picked an American firm to monitor the local crypto assets. This is according to a report by the Times of Malta on March 11th. Its main goal is to keep an eye on digital money that passes through Malta.

Ciphertrace can detect whether there is money laundering or terrorism finance by tracking the flow of crypto on the blockchain. Ciphertrace will also track ICO wallets.

Virtual Financial Agents

Currently, the MFSA is processing license applications from 29 crypto businesses, to act as Virtual Financial Agents (VFAs). After they are licensed, they will have to submit further applications so that they can work as can act as exchanges, ICOs or digital wallet vendors.

To get and keep their licenses, the VFAs will have to show that they have systems in place to detect and prevent illegal activity on their platforms. They also need to show due diligence while running their businesses.

Ciphertrace will be tasked with keeping an eye on these firms. Every asset which passes through a VFA will be scrutinized. This will prevent fraud and other monetary crimes.

A Little About Ciphertrace

Ciphertrace was founded in Silicon Valley in 2015. It deals with blockchain security, with a special focus on money laundering. It also handles crypto forensics and blockchain threat intelligence.

The firm developed a tool that scans the network for signs of these illegal activities. Dubbed ‘Supertech,’ the tool uses AI to remove the anonymity of transactions. It can then show a risk exposure report of a business.

Crypto businesses have a tough time opening bank accounts. They have to be compliant on many fronts, and banks have few tools to check their trustworthiness. Most of the time, banks have blanket policies which lock out the businesses, instead of considering them on a case-by-case basis.

Per the CEO of Ciphertrace, Dave Jevans,

…Cryptocurrency businesses often have difficulty establishing trust and maintaining banking relationships because of their perceived risk. Banks and other financial institutions use the [Ciphertrace] solution to help decide which virtual asset businesses to trust as corporate customers…

Malta Local Banks can Use Supertech

The Supertech tool solves this problem. Banks in the US have used it to run background checks on businesses when they apply for bank accounts. The MFSA has appointed Ciphertrace to work with local banks to enable analysis. Crypto businesses can now be checked for their risk profile, and if they can fit the bank’s risk appetite, before opening an account.

This comes after the International Monetary Fund (IMF) cautioned Malta about allowing crypto businesses to operate in the country. It said that the industry is fraught with risk and needs sufficient expertise to handle and regulate.

Do you think Ciphertrace can reduce crypto-related crimes? Let us know in the comments section below!

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