Central banks launch project Atlas to monitor crypto risks

Central banks launch project Atlas to monitor crypto risks

Project Atlas has initially been used to map out significant off-chain international flows between crypto exchanges, said a proof-of-concept report issued jointly with the Dutch and German central banks.

Central bankers are looking to gain better knowledge of risks in markets that are often difficult to understand. Although BIS first proposed the concept of a 'cryptocurrency market intelligence platform' in June 2022, recent events such as the collapse of the FTX exchange have highlighted the dangers of unregulated actors operating in opaque markets.

BIS, a global body that monitors central banks, warns that Crypto data can be manipulated or distorted. As much as 70% of trading on some exchanges is wash trading, an outlawed activity in which identical traders buy and sell the same asset to mislead and manipulate markets.

Major centralized exchanges such as Binance have sought to ease investor concerns by publishing details of the wallets they control, a form of assurance called proof of reserves that BIS says could be used for novel approaches to data-driven supervision in the future.