In a letter PubliziertOn Thursday, New York State Department of Financial Services will or NYDFSThe regulatory agency recommended all virtual currency businesses operating under New York banking laws adopt blockchain analytics in order to track transactions. To support the recommendation, the regulator wrote:

According to NYDFS it’s vital for such firms to use blockchain analytics in order prevent illegal transactions such as money laundering and terrorism financing. Three analytical steps can be used to combat these measures were also described by NYDFS. The agency also outlined three analytical processes that can be used to combat such measures: augmenting Know Your Customer controls (or KYC), conducting transaction monitoring on-chain activities and screening for sanctions.

1. Automation of real-time transactions monitoring by creating risk scores for addresses.
2. Alerts are sent to alert you if any changes occur to your risk profile.
3. Configure and integrate rule engines with existing tools for case management.
4. Scan of transactions to detect anti-terror funding and any other AML-related flags.