CipherTrace Expands Analytics Services to Binance Smart Chain, Combating Exploits

One of the most trusted names in DeFi security is now protecting the BSC blockchain

BSC Adds Layer of Security

CipherTrace announced the news of the relationship on Thursday 27 May. The California-based company uses sophisticated blockchain analytics to seek out illicit transactions and will be incorporating their software on BSC. CipherTrace will begin monitoring the more than 600 decentralized applications (dApps) currently on BSC. 

The addition of CipherTrace’s transaction tracking and wallet attribution software will look to flag suspicious transactions on BSC and help prevent illegal activity like fraud. CipherTrace maintains a close relationship with crypto regulators like the global anti-money laundering watchdog the Financial Action Task Force (FATF).

The addition of CipherTrace can also help BSC become more compliant with traditional finance and appease crypto regulators. It is a very timely addition as The FATF has recently taken a more hardline stance toward crypto.

One of the main services will be to assess the degree of ‘know-your-customer (KYC) activity that happens with virtual asset service providers (VASPs). CipherTrace will give each transaction a score based on the perceived suspicions. The color scheme includes green for good, yellow for middling, and red for poor. Ciphertrace is unable to know where exactly transactions come from. They will determine the grade based on whether that address has interacted with illicit addresses in the past or if it is connected to a previous scam or attack.

An Increasing Need for Security

The Binance Smart Chain is growing at an impressive rate, so have come the number of attacks on the chain. Crime in DeFi is hitting an all-time high in the first half of 2021. Ethereum’s high gas fees have led many in DeFi to seek alternatives. 

Attacks in DeFi are not new and not unique to BSC. Researchers at CipherTrace detailed in an April blog post what they called the “inevitably” that rapid growth in DeFi would increase illicit activity. Dave Jevans, CEO of CipherTrace, confirmed this to Reuters in early May.

 “As more money pours into the space from retail and institutional players, bad actors will seek to take advantage of the hype to draw people into scams and hackers will seek out projects that have launched without performing adequate security audits, exploiting loopholes encoded in the smart contracts.” 

Binance’s confirmation that a rollback of exploits on the chain would not be possible. Samy Karim, a coordinator of business and ecosystem development for Binance, said “It is not possible in the way that a lot of people think for there to be some kind of rollback,” at CoinDesk’s Consensus 2021.

The hope is to combat money laundering and illicit activity across the universe. Binance also admitted recently that rug pulls on the community-governed chain are not their responsibility. Added security on BSC from CipherTrace should be a welcoming sign following Binance Exchanges’s recent bout with U.S. Justice Department and Internal Revenue Service.

Concluding Thoughts

The Binance ecosystem is growing fast and it is natural to have growing pains. It is a welcoming sign that the exchange is taking the recent attacks seriously and has taken action to shore up the securities in the ecosystem. The addition of CipherTrace is a smart and calculated move and should see benefits to the chain and its security. 

Source : bsc.news