In a letter PublishedThe New York State Department of Financial Services or NYDFS recommended Thursday that all New York-based digital currency firms operate under New York bank law. Blockchain analytics is a way to track transactions. Assisting the decision was the regulatory agency:

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; conducting transaction monitoring on-chain activity; and screening on-chain activity 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 rule engines easily and gain unique insight into third-party case management software.
4. When possible, screen transactions to identify anti-terror financing or other Anti-Money Laundering– (AML-)-related flags.