By
Temitope Olatunji
April 26th, 2024
The announcement of KPMG Canada’s partnership with Chainalysis coincides with broader industry efforts to tackle fraud associated with crypto.
The KPMG Canada has announced a strategic partnership with blockchain analytics firm Chainalysis in response to the escalating threats of exploits and fraud within the crypto sector.
Kunal Bhasin, Partner and Cryptoassets and Blockchain Co-leader at KPMG Canada, emphasized that “this collaboration will help to further solidify KPMG’s expertise in forensic investigations and cryptoassets and blockchain technology.”
The KPMG Canada and Chainalysis Approach
As the digital assets ecosystem expands, so does the threat of fraud and criminal activities. The decentralized and pseudonymous nature of blockchain technology has made it an attractive platform for illicit activities such as money laundering, ransomware attacks, and fraud.
Companies operating in the digital assets space face the daunting task of safeguarding their platforms and transactions against these evolving threats. According to the Chainalysis 2023 Crypto Crime Report, crypto-based illicit transaction volume reached an unprecedented $20.6 billion last year.
Notably, the sector faces increasingly sophisticated threats, such as wallet hacks and SIM swaps. A recent high-profile incident saw crypto exchange Poloniex lose approximately $114 million when hackers targeted its hot wallets. besides Poloniex, other platforms have also suffered one form of exploit or the other in the past year.
In response to these escalating threats, KPMG, a renowned global consulting giant, is leveraging its expertise to fortify the defenses of companies operating in the crypto ecosystem. Through this strategic partnership, KPMG aims to provide comprehensive solutions to identify, prevent, and mitigate fraud risks associated with digital assets.
The collaboration is not only geared towards preventing fraud but also towards ensuring regulatory compliance within the digital assets sector. As governments around the world grapple with developing appropriate regulations for the growing crypto market, companies face the challenge of aligning their operations with evolving compliance standards. The collaboration, therefore, seeks to improve their Anti-Money Laundering (AML) compliance processes.
Industry-Wide Collaboration against Crypto Fraud
Meanwhile, the announcement of KPMG Canada’s partnership with Chainalysis coincides with broader industry efforts to tackle fraud associated with crypto. Mastercard Inc (NYSE: MA), in a recent report, revealed its partnership with Feedzai, a regulatory technology platform that employs Artificial Intelligence to combat online money laundering and financial fraud.
Through this collaboration, Feedzai will integrate with Mastercard’s CipherTrace Armada platform, monitoring transactions from over 6,000 crypto exchanges for potential fraud, money laundering, and other suspicious activities.
Remarkably, KPMG Canada has been actively involved in the crypto sector, showcasing its dedication to embracing emerging technologies. Last year, the firm entered the metaverse by establishing its first collaboration hub between its US and Canadian units.
Additionally, KPMG added Bitcoin (BTC) and Ethereum (ETH) to its balance sheet, demonstrating a forward-looking approach to incorporating digital assets into traditional financial strategies. The firm also ventured into the realm of Non-Fungible Tokens (NFTs), purchasing digital art from the World of Women (WoW) NFT collection.