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

By Bhushan Akolkar
Published April 9, 2021 Updated April 9, 2021
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CipherTrace Introduces Compliance Solutions for DEX and DeFi Protocol Using Chainlink Network

By Bhushan Akolkar
Published April 9, 2021 Updated April 9, 2021

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.”


The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
About Author
Bhushan Akolkar
824 Articles
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.

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