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COPENHAGEN (Reuters) - Danish electronic payments provider Nets will cooperate with anti-money laundering software developer Chainalysis to help banks validate bitcoin transactions and comply with regulations, Nets said on Friday.
The digital currency relies on computer algorithms to move money without a central processing authority, but also risks attracting illicit activities such as drug trafficking or money laundering, according to EU law enforcement agency Europol.
"An increasing number of our customers among the Nordic banks have asked for an effective tool to help them comply with legislation," Kati Rintala, head of Nets' fraud division, said in a statement.
Chainalysis, which also collaborates with Europol, can help banks and law enforcement detect suspicious activity and link digital identities to digital currency, it said.
"We can make risk assessments and analyze block chain activities... And banks are interested in being able to risk-score customers, so they do not end up being used for money laundering," Chainalysis CEO Michael Gronager told Reuters.
"If a bank's customer is a risk, the financial institution can choose to send a "suspicious transfer report" to the authorities, which can use our tools to trace and identify the customer," Gronager added.
Nets provides services to more than 240 financial institutions in the Nordic region including Danske Bank, DNB and Nordea.
Reporting by Nikolaj Skydsgaard, editing by Terje Solsvik