Non-fungible token (NFT) developer Dapper Labs has agreed to a long-term partnership with blockchain tracing firm Chainalysis to detect and prevent NFT money-laundering and market manipulation.
Chainalysis said Thursday that Dapper Labs will use Chainalysis’s KYT (Know Your Transaction) and Reactor compliance tools, which flag suspected criminal activity and enable deeper investigations into those transactions, respectively. Dapper expects illicit activity could ramp up as NFTs hit mainstream adoption.
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“NFTs are one of the most exciting spaces in cryptocurrency, but they will only be successful in the long term if we can ensure a safe environment for our customers,” Naeem Bawla, associate director of compliance at Dapper Labs, said in a press release. “We’re thrilled to partner with Chainalysis to keep potential bad actors off our platform, combat money laundering, and at the same time, stay on top of the quickly evolving local and global regulatory and compliance space.”
Dapper’s deal with Chainalysis comes on the heels of Dapper announcing a $250 million funding round at a $7.6 billion valuation in September.