A recent partnership brings Cardano back into the news. The Cardano Foundation announced that it is working with blockchain analytics provider Coinfirm to improve the security of the blockchain and its ADA token. This partnership has sparked a lot of discussion inside and outside the community. As an investor in the crypto space, you are trying to figure out how this will affect Cardano and the market as a whole.
The partnership was formed in response to growing pressure to regulate cryptos. This will enable Cardano to fully comply with 6AMLD and the guidelines of the Financial Action Task Force (FATF). At the same time, it ensures that it complies with national and supranational regulations.
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Why the partnership is important
Cardano undoubtedly wants to be able to participate in regulated markets worldwide. And to do this, it must comply with all the regulations that apply in these markets. Coinfirm will help you with their services. “AML / CFT analyzes are essential for the mass adoption of a cryptocurrency in regulated markets,” said Mel McCann, Head of Technical Integrations at the Cardano Foundation. “We are proud to work with Coinfrim for 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 analyzes for all assets imprinted on the Cardano blockchain. This applies to both assets that were minted prior to the partnership as well as future assets. This will allow law enforcement agencies to track down illegal activities carried out by malicious actors on the blockchain.
AML compliance solutions help reduce the risk of transactions being discovered or hijacked by criminals. This offers more security to investors participating 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 illegal funds. This provides a seamless transition for financial institutions to adopt the protocol on a large scale and reduce the content of AML / CFT compliance. ”- Sachin Dutta, Marketing Director, Coinfirm
Response from the Cardano community
Cardano’s decision to go this route has resulted in some interesting launches. Many investors believe this will be a way for the government to monitor its citizens. You are contradicting everything that crypto stands for; Giving individuals control of their assets without government intervention.
ADA trading above previous all-time high | Source: ADAUSD on TradingView.com
Coinfirm’s analytics services make it possible to track every transaction that has ever been carried out with ADA in a wallet. While this information helps keep the network secure, it can also be used to track citizens and the way they move their money.
On the other hand, others have argued that some level of surveillance is a necessary evil for crypto to really go mainstream. Knowing that transactions can be tracked will help build more trust in crypto. Both institutionally and individually.
Featured image by Coin Gyaan, chart from TradingView.com