Following the Money with Chainalysis: 7 Questions for Usman Rehman
Following the Money is a Q&A sequence that spotlights how Chainalysis prospects use our merchandise in the actual world — from compliance groups and investigators to pioneers driving crypto adoption.
Usman Rehman is the Group Vice President of Compliance at Rain.
1. What’s the greatest false impression about your job?
People typically assume that good crypto compliance is all about having the proper insurance policies, programs, and procedures, however in actuality it’s about the individuals behind them. Internal compliance groups want to really perceive why sure controls exist and what particular dangers they’re designed to mitigate. That stage of understanding doesn’t come from studying a coverage guide; it comes from understanding how the business really works. You want to know how companies comparable to centralized exchanges, decentralized platforms, OTC desks, and mixers function in observe. Once you perceive the mechanics, you may design controls which can be efficient and spot dangers that others may miss. Real compliance isn’t theoretical; it’s sensible and constructed by individuals who perceive each regulation and the way crypto strikes in the actual world.
2. What’s the wildest rabbit gap Chainalysis ever led you down?
One of the most fascinating instances began with what seemed like a routine transaction that triggered a reasonable threat flag. When we dug deeper utilizing Reactor, we uncovered a sample of exercise linked to a coordinated fraud community working throughout a number of platforms. It wasn’t instantly apparent at first look, however the on-chain conduct informed the story. By recognizing it early, we had been capable of block associated exercise and shield a number of prospects from potential losses.
3. Where do you assume the greatest gaps are in public/personal collaboration and what are you doing to bridge them?
This is one thing I really feel genuinely obsessed with. I’m very proud to be a part of the Rain group, as we’ve at all times valued collaboration and transparency with regulators, regulation enforcement, and different related authorities. We recurrently host and attend occasions that deliver collectively the private and non-private sectors, and we’ve finished so for a few years to assist bridge the hole and strengthen mutual understanding.
There’s undoubtedly room for enchancment throughout the wider business. Things transfer extremely quick in crypto, and communication between the private and non-private sectors wants to maneuver simply as rapidly. Many crypto corporations function by a mixture of regulated and unregulated entities, which makes it troublesome to construct a common communication channel the place everybody can contribute meaningfully.
I additionally assume there’s a chance to create a structured means for crypto compliance groups to share intelligence with one another. That would assist forestall dangerous actors from being offboarded by one agency, solely to reappear at one other with the identical intent. The business will bridge this hole over time, however it should take real collaboration between the related counterparts to make it occur.
4. How has your work modified the means you consider cash or belief?
How individuals view cash and the stage of belief they place in the international monetary system has at all times fascinated me, and I’ve finished loads of studying on the subject over the years. I began buying and selling crypto round 2016, so my work in all probability hasn’t modified the means I take into consideration cash all that a lot.
What has shocked me from my work, although, is how a lot belief individuals put in unregulated exchanges with out actually understanding who holds their funds. It’s one thing I’ve seen repeatedly, and I at all times inform buddies to commerce or maintain belongings solely with regulated companies.
5. Which blockchain do you assume will outline the subsequent 5 years?
For me, the reply has at all times been bitcoin, and I don’t see that altering. Other blockchains have introduced unimaginable innovation, comparable to sensible contracts, DeFi, and tokenization, however bitcoin stays the basis of the whole ecosystem, the most safe, decentralized, and time examined community on the market. While different chains will proceed to evolve, bitcoin nonetheless defines what digital belief and worth preservation actually imply.
6. If you could possibly automate one a part of your job, what wouldn’t it be?
Automation may actually assist with monitoring regulatory change throughout jurisdictions. Crypto regulation strikes quick, and it takes big effort to map every replace to inner controls and insurance policies. A sensible system that mechanically hyperlinks new guidelines to current frameworks could be a recreation changer for international compliance groups.
7. What’s a sample you’ve skilled your self to identify instinctively?
When reviewing blockchain exercise, I’ve realized to note when one thing appears to be like like a service entity, comparable to an trade, even when it hasn’t been tagged but. Sometimes, you’ll see a high-risk deal with that’s nonetheless uncategorized, however the transaction move, variety of counterparties, and behavioral patterns mirror what you’d anticipate from a service. Identifying this early saves loads of time throughout an investigation. Once you’ve reviewed sufficient on-chain exercise, you begin to acknowledge the rhythm of how official companies transfer funds in comparison with people or dangerous actors.
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