Danish Firms Partner On Cryptocurrency Security For Banks

As far as cryptocurrencies have come in recent years, a number of security and fraud risk elements still remain. But developers are working to bring the seedier side of bitcoin to a close.

Anti-money laundering and blockchain analysis software developer Chainalysis and Danish electronic payments provider Nets have reportedly teamed up to create solutions for Nordic banks that will validate bitcoin transactions and help financial institutions comply with regulations.

Nets reportedly provides payment services to over 240 financial institutions in the Nordic countries, including Danske Bank, DNB and Nordea. Chainalysis collaborates with Europol to link digital identities to digital currency, helping banks and law enforcement investigate suspicious activity.

“We can make risk assessments and analyze blockchain activities,” Chainalysis CEO Michael Gronager told Reuters. “And banks are interested in being able to risk-score customers, so they do not end up being used for money laundering …. If a bank’s customer is a risk, the financial institution can choose to send a ‘suspicious transfer report’ to the authorities, which can use our tools to trace and identify the customer.”

This isn’t the only cryptosecurity news to come out of Denmark as of late. Recently, the nation’s cybercrime police unit claimed to have successfully prosecuted drug traffickers based on bitcoin transaction information sourced by a specialized software developed by the Danish National Cyber Crime Center.

All bitcoin transactions by design are recorded in a permanent public ledger accessible to anyone. While transaction are openly traceable and wallet addresses are public, they are not directly tied to any personally identifying information, which has led to the adoption of the cryptocurrency by crime syndicates and hackers. The ability to reliably tie cryptocurrency transactions to individuals could be a game changer for law enforcement.

Police chief Kim Aarenstrup was quoted by Berlingske as saying, “The potential of this is groundbreaking. The investigation can now proceed from where it used to stop before …. We are in dialogue with a number of other nations right now to develop additional methods and teach them how we do it here.”