CipherTrace Introduces Compliance Solutions for DEX and DeFi Protocol Using Chainlink Network

Bhushan Akolkar
April 9, 2021 Updated July 23, 2022
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CipherTrace, a leading crypto intelligence company has launched its new compliance solution CipherTrace DeFi Compli that helps decentralized exchanges (DEXs) and DeFi applications to abide by the rules and regulations of the Office of Foreign Assets Control (OFAC).

This is a big step towards bringing legitimacy to the fastly evolving DeFi space. The CipherTrace DeFi Compli is basically an Oracle service on the Chainlink blockchain network that makes all the relevant data available easily and directly on-chain for easy and quick integration with the existing DeFi frameworks.

The regulatory compliance measures in the DeFi space are tightening up further as nearly 50% of the crypto hacks last year happened in DeFi and DEXs. Besides, industry reports suggest that funds stolen from centralized exchanges are further laundered through decentralized finance (DeFi) protocols. CipherTrace CEO Dave Jevans said:

“The $40B locked in DeFi protocols puts an even bigger target on DeFi exchanges and protocols. Ensuring that sanctioned addresses cannot use DeFi to fund weapons of mass destruction programs should be among DEXs’ chief concerns right now. CipherTrace’s DeFi Compli regulatory compliance oracle on Chainlink can support DeFi protocols in achieving the compliance needed to ensure crypto’s long-term viability.”

Regulatory Enforcement in DeFi Coming Ahead

The regulatory bodies worldwide have been keeping a close vigilance on the developments in the crypto space, including DeFi. The U.S. SEC has already set its eyes on the DeFi space with a massive explosion in decentralized money lending, borrowing, and earning interest.

Last September,  Valerie Szczepanik, Head of the Strategic Hub for Innovation and Financial Technology at the U.S. SEC said: “We’ve seen structures that purport to enable users to lend money, earn interest, borrow money, exchange, take positions; these are all financial activities, and they are likely subject to various laws already, including securities law, potentially banking and lending laws—definitely AML/CTF laws.”

The CipherTrace Chainlink node will broadcast CipherTrace’s API data on any blockchain network. Besides, it will also digitally sign on-chain data for strong cryptographic assurances to make sure that the data has arrived from CipherTrace without any tampering.

This high-refined data will be further delivered to blockchain-based smart contracts using Chainlink oracles. This will thus unlock massive opportunities for developers to build genuine data-driven products for individuals, businesses, and governments. Head of Partnerships at Chainlink Labs Daniel Kochis, said:

“Despite the significant growth DeFi has witnessed in the past year, many DeFi protocols are currently limited in their ability to leverage compliance tools. By launching their own Chainlink node, CipherTrace brings a compliance oracle solution to DeFi, making integrating compliance data as simple as possible for DEX and other protocols.”

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Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
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Why Trust CoinGape

CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights Read more…to our readers. Our journal analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

About Author
About Author
Bhushan is a seasoned crypto writer with over eight years of experience spanning more than 10,000 contributions across multiple platforms like CoinGape, CoinSpeaker, Bitcoinist, Crypto News Flash, and others. Being a Fintech enthusiast, he loves reporting across Crypto, Blockchain, DeFi, Global Macros with a keen understanding in financial markets. 

He is committed to continuous learning and stays motivated by sharing the knowledge he acquires. In his free time, Bhushan enjoys reading thriller fiction novels and occasionally explores his culinary skills. Bhushan has a bachelors degree in electronics engineering, however, his interest in finance and economics drives him to crypto and blockchain.
Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.
Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.