The BRD team is spearheading a new initiative: Blockset, a business-to-business blockchain technology stack with a bent towards compliance, surveillance and security for cryptocurrency companies and government agencies.
After its 2014 launch, Bread was the first Bitcoin wallet to land on Apple’s app store. A couple of years later, the wallet launched a $32 million initial coin offerings and changed its name to BRD in a bid to “unify” its brand. Since then, BRD has expanded its coin support, launched new features like payment IDs, and expanded in-wallet crypto purchases to a motley of fiat currencies.
Now, for its latest initiative, BRD has recently partnered with blockchain analysis/intelligence companies Chainalysis, CipherTrace and Elliptic, along with security firm Unbound Tech. The latter has been instrumental in securing Blockset’s key management features, while the former companies will provide Blockset with regulatory compliance and blockchain monitoring tools.
Blockset: A suit-and-tie tech stack
“Layering these crucial applications on top of Blockset allows us to offer a comprehensive, broad-use offering to financial institutions from a single platform. This also enables our enterprise customers to address many use cases across all their crypto projects from a single vendor,” BRD CEO Adam Traidman told CoinDesk.
Per a Blockset press release, the new tech stack will provide anti-money laundering (AML), fraud detection and other compliance tools along with key management, security measures and data feeds for “financial institutions, government agencies, and cryptocurrency businesses.”
For AML and compliance, the software combines Chainalysis’ know-your transaction tools with CipherTrace’s “Travel Rule” compliance software. These features, along with risk-management software from Elliptic, will create real-time alerts to flag suspicious or fraudulent activity and “tainted” transactions for Blockset clients.
Traidman told CoinDesk that BRD is marketing its Blockset services primarily to financial institutions and banks that need sound compliance and key-management solutions. Regulators and government agencies are another logical fit given Blockset’s partnership with leading blockchain analysis firms.
According to BRD, SBI Holdings, PayPal, KPMG and Ripple’s developer initiative Xpring have all participated in a private pre-release of Blockset’s technology, along with some 16 other firms.
BRD, which reportedly has over six million downloads and 550,000 monthly active users, “is powered by Blockset,” according to BRD documentation shared with CoinDesk. A BRD representative claimed that the wallet will not use Blockset’s AML and compliance features; instead, Blockset is just used to quickly sync BRD wallets with Bitcoin’s (and other coins’) transaction histories.
Compliance comes to crypto
BRD’s new initiative is another tech stack in the fast-growing landscape of crypto-compliance software.
Some time ago, the Financial Action Task Force recommended that crypto transactions should adhere to the Travel Rule – a banking mandate wherein transactions greater than $10,000 must include fund-sourcing disclosure and payer/payee identity information. Since then, crypto companies have chased solutions to streamline compliance tools for exchanges, brokers, service providers and other market participants.
“Compliance is of utmost importance for any financial institution. It’s important for banks and enterprises to have the foresight to stay ahead of the regulatory curve. They need the knowledge and resources to protect their clients and themselves,” Traidman told CoinDesk.
Still, critics of the Travel Rule have weighed whether or not it hampers cryptocurrency business with undue burdens and even whether or not such a rule is sustainable at scale.
Indeed, the recently leaked “FinCen files” illustrate the failure of financial surveillance in the legacy financial system as some $2 trillion worth of money-laundered funds were pushed, sans renovation or consequence, through accounts held by criminals, oligarchs and other powerful persons at JPMorgan, HSBC, Standard Chartered Bank, Deutsche Bank and Bank of New York Mellon.
As the same surveillance burden comes to the Bitcoin economy, perhaps the public nature of the blockchain’s digital ledger will make enforcing these mandates easier – if privacy preserving technology doesn’t keep up with the regulatory requirements, that is.