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Robinhood will be leveraging Chainalysis’ Know Your Transaction (KYT) and Reactor software for managing compliance.
The very popular zero-fee trading platform Robinhood has been mulling into to get in the crypto market soon. As a result, Robinhood has recently joined hands with blockchain security firm Chainalysis.
Robinhood and Chainalysis Cooperation
Although Robinhood hasn’t finalized yet the date for its crypto wallet launch, it’s keen on taking the “safety first” approach. As part of this partnership, Chainalysis will be providing Robinhood with essential data and tools for trading purposes.
Chainalysis also noted that the integrated partnership will help the trading app meet the compliance requirements. As per the estimated timeline, the Robinhood crypto wallet shall roll out sometime in early 2022. At that time, the crypto brokerage app shall eventually use Chainalysis’ Know Your Transaction (KYT) and Reactor software for managing compliance.
The KYT software from Chainalysis will flag any suspicious transactions in real-time. Besides, it will also help the company monitor issues related to money laundering. The Reactor software will also provide Robinhood with a complete interface while guiding the Robinhood team with in-depth analysis of on-chain data.
Robinhood also mentioned that it will be having its teams complete the Chainlysis certificate program. Ben Einstein, Robinhood Crypto head of partnerships said:
“The executive team has spent significant resources and capital to embed [the “safety first” policy] into every level of the organization. Chainalysis works closely with regulators and law enforcement to develop industry best practices and that approach is aligned with Robinhood’s commitment to working with policymakers in a collaborative manner.”
Robinhood’s Plans with Crypto Wallet
The zero-fee crypto trading app Robinhood has been popular among millennials. However, it has received significant flak through this year.
It started with the GameStop mega rally earlier this year. Back then Robinhood had halted trading amid massive orders by retail investors, especially the WallStreetBets Reddit group. The service outage from Robinhood had left a bad image for the company among users. It ultimately led to an investigation by the Financial Industry Regulatory Authority (FINRA).
Besides, in June, FINRA also slapped a $70 million fine on Robinhood citing the harm to users caused by system outages, misleading communications, and inappropriate approvals for complicated trades.
As a result, Robinhood seems to be playing it safe before the crypto wallet launch. The intense focus and safety and compliance come following this bumpy ride. However, the demand for Robinhood’s crypto wallet seems to be very high.
Robinhood said that more than 1.6 million people are already on the waitlist for a crypto wallet that will support depositing and withdrawing Bitcoin (BTC), Ether (ETH), Dogecoin (DOGE), and other tokens.