The key to bridging the gap between crypto and TradFi

cointelegraph.com:

The gap between traditional finance and the cryptocurrency world is still vast. However, up-and-coming solutions like Source of Funds checks can change that. Blockchain analytics and compliance companies are already looking into ways to legitimize users’ cryptocurrency assets and their origins for traditional financial institutions. 

In January 2022, the European Parliament adopted a legislative measure to start tracing the source of digital assets in an effort to limit illicit funding entering the EU. This was a big step toward merging crypto and traditional finance. But what can individual traders and investors do to legitimize their crypto wealth? The answer lies in Source of Funds checks. 

One of the main advantages blockchain technology offers is transparency and unprecedented traceability. Yet, banks are still far from accepting your transaction history as proof that your crypto assets were obtained legally and licitly. The reason for that lies in the anonymity aspect of distributed ledger technology. Your bank does not really know who these cryptocurrency wallets belong to. Therefore, they cannot verify the legitimacy of your assets. 

This is where companies like Coinfirm come in and introduce detailed Source of Funds checks and reports. Coinfirm is a blockchain analytics company with a long-standing history in the space. Their latest product release is a dedicated Source of Funds report that allows customers to verify that their digital assets were licitly obtained, regardless of whether this happened through standard crypto operations like staking and liquidity mining or through direct purchases from centralized exchanges. 

A Source of Funds check tracks all transactions coming in and out of a client’s