A recent partnership has Cardano in the news once again. Cardano Foundation announced that it was partnering with blockchain analysis provider Coinfirm to enhance the security of the blockchain and its token ADA. This partnership has sparked a lot of debate in and out of the community. As investors in the crypto space try to figure out how this will affect Cardano and the market at large.
The partnership was struck in response to mounting pressure for cryptos to be regulated. Doing this will put Cardano in full compliance with 6AMLD and the Financial Action Task Force’s (FATF) guidelines. While also making sure it is compliant with national and supranational regulations.
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Why The Partnership Is Important
Cardano no doubt wants to be able to participate in regulated markets worldwide. And for this to happen, it has to be compliant with all of the regulations in place in these markets. Coinfirm will help them achieve this with their services. “AML/CFT analytics is essential for a cryptocurrency to receive mass adoption within regulated markets,’ said Mel McCann, Head of Technical Integrations at Cardano Foundation. “We are proud to work with Coinfrim due to their high-quality results and product offerings as the first analytics solution lives on the Cardano blockchain.”
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Coinfirm will provide Cardano AML/CFT analytics for all of the assets minted on the Cardano blockchain. This will apply to both assets already minted before the partnership and future assets. This will enable law enforcement agencies to track down illegal activities being carried out on the blockchain by bad actors.
AML compliance solutions help to mitigate the risk of having transactions being exposed or hijacked by criminals. Thus, providing more safety for investors who participate in these regulated markets.
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“Coinfirm is excited to integrate the Cardano protocol with our AML Platform to ensure that counterparts using the ADA cryptocurrency and other assets created on Cardano are not tainted by illicit funds. This provides a seamless transition for financial institutions to uptake the protocol with scale, reducing the content of AML/CFT compliance.” – Sachin Dutta, Head of Marketing, Coinfirm
Cardano Community Response
Cardano’s choice to go this route has led to some interesting takes in the market. A lot of investors believe that this will be a way for the government to carry out surveillance on their citizenry. Thereby going against everything crypto stands for; giving individuals control over their wealth without government intervention.
ADA trading above previous all-time high | Source: ADAUSD on TradingView.com
Coinfirm’s analytics services will make it so every transaction ever carried out using ADA in a wallet can be tracked. And while this information helps secure the network, it can also be used to track citizens and the way they move their money.
On the flip side, others have argued that for crypto to truly become mainstream, a level of surveillance is a necessary evil. Knowing that transactions can be tracked will help put more trust in crypto. Both institutionally and individually.
Featured image from Coin Gyaan, chart from TradingView.com