Software Company Chainalysis Approves Bitcoin Lightning Network Payments

SYNOPSIS

  • Chainalysis, a blockchain data platform, will introduce support for the Lightning Network, a layer two protocol on the Bitcoin blockchain.
  • Companies who handle Bitcoin payments using Lightning nodes will be able to use Chainalysis Know Your Transaction compliance software as a result of the connection.
  • The VASP term used by Chainlysis in its news release is based on revised Financial Action Task Force recommendations released at the end of October.

In February 2022, Chainalysis, a blockchain data platform, will introduce support for the Lightning Network, a layer two protocol on the Bitcoin blockchain.

Companies who handle Bitcoin payments using Lightning nodes will be able to use Chainalysis Know Your Transaction compliance software as a result of the connection.

It also implies that virtual asset service providers (VASPs), such as exchanges, will be able to process Bitcoin transactions in accordance with international standards.

“The Lightning Network user experience will remain same,” a Chainalysis official said.

The VASP term used by Chainlysis in its news release is based on revised Financial Action Task Force recommendations released at the end of October. The multinational organisation maintains anti-money laundering best practises.

Ian Andrews one of the pivotal member of Chainalysis syas that he’s “bullish on bitcoin”.

Future Of Lightning Network

Chainalysis believes that “slightly under 3,600 BTC worth over $205 million is locked in public Lightning Network channels” as of December 1, 2021.

Since the entire value locked in the LN was roughly 468 BTC on January 1, 2021, this has climbed significantly. The LN L2 system is also used by governments like El Salvador and huge firms like Twitter, according to Chainalysis.

According to Chainalysis’s chief product officer, Pratima Arora, the company expects that compliant LN transfers would help the LN mature.

Chainalysis has significantly increased its resources and now competes against several of blockchain intelligence and monitoring firms.

The firm raised $100 million in its Series E investment round at the end of June. It had previously raised $100 million in its C and D rounds. According to the firm’s statement at the time, the company’s post-Series E value was $4.2 billion.

Chainalysis states that for the first time, “VASPs may now offer support for Lightning transactions consistent with worldwide regulatory best practises,” referring to the LN support.

Chainalysis KYT, a solution offered by Chainalysis, allows for “pre-screening for Lightning withdrawals and behavioural alarms”. The LN functionality will be available for Chainalysis KYT customers in February, according to the blockchain monitoring and analytics firm.

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Image Credits: Reuters

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  • M64EKYMKPZJXPKUEDR4BPKA57A: reuters.com

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