Chainalysis, found online at Chainalysis.com, promises to protect the integrity of digital assets using a blockchain-based analysis solution. Here’s our review.
What Is Chainalysis?
Chainalysis is a platform that verifies blockchain-based transactions. So far, Chainalysis has checked over $15 billion worth of bitcoin transactions on behalf of its customers.
To do that, Chainalysis offers two core products, including “Reactor” and its API. Reactor is an interactive investigation tool that automatically finds connected bitcoin wallets and transactions.
Chainalysis’s platform is catered towards financial institutions, bitcoin businesses, tax authorities, and cyber threat intelligence analysts (or law enforcement). The company was founded in 2014. Today, it’s a world leader in KYC/AML verification, and helps major bitcoin exchanges – and Barclays- complete due diligence when working with blockchain clients. Chainalysis has also partnered with Europol and other international police organizations to track how criminals move money worldwide.
The IRS has also partnered with Chainalysis to find bitcoin tax cheats. That partnership was revealed in August 22: Chainalysis had initially sent the IRS a letter claiming they have information on 25% of all bitcoin wallet addresses. Now, the IRS is reportedly paying Chainalysis to track the bitcoin holdings of Americans.
Chainalysis aims to provide benefits to three main parts of the industry, including financial institutions, bitcoin businesses, and cyber threat intelligence services.
Financial Institutions Benefits
Activity Monitoring Reports: Financial institutions can receive reports on the blockchain activity of customers. Chainalysis breaks down blockchain activity into different categories, allowing financial institutions to assess the risk of doing business with each on-boarded customer.
Enhanced Due Diligence Tools: Chainalysis has an enhanced due diligence tool that lets users visualize the source and destination of funds. This can help users investigate transactions before a quarterly review, or check an alert triggered by a blockchain client.
Cyber Threat Intel: Train your analysts to be able to spot emerging threats from the deep web and investigate ransomware or extortion notes in-house.
Bitcoin Business Benefits
Risk Score API: Chainalysis provides a real-time API that can determine the activity associated to the source or destination of bitcoin funds. This API works in real time. Businesses can also customize what types of activity they wish to avoid, then take appropriate action.
Enhanced Due Diligence: Chainalysis’s API can send alerts to users based on certain activity. These alerts can also be sent by the business’s existing KYC/AML verification system. Once an alert appears, businesses can use Chainalysis’s web-based investigation software to determine the source and destination of customer’s bitcoins.
Improve Banking Relations: Chainalysis lets businesses improve their relationship with banks. They can present data from an independent source. This data verifies the activity of customers with bitcoins. Sharing limited data with your bank helps the bank be more comfortable with your business practices.
Cyber Threat Intelligence Benefits
Understand Threat Actors: Criminals are increasingly using digital currencies to fund their infrastructure. Using the Chainalysis web-based investigation tools, you can identify criminal activity and determine the likely attack vectors facing you or your clients.
Quantify Cyber Criminal Revenues: Cyber criminals are using bitcoin – among other mechanisms – to extort payment from victims. Chainalysis aims to establish connect connections between victims to give an estimation of the criminal’s revenues.
Attribution: Users can follow traces of bitcoin to find the services that cyber criminals are using to convert bitcoin into cash and other assets.
Chainalysis offers two core products, including their Reactor investigation tool and their monitoring APIs.
Reactor is an interactive investigation tool. You can use Reactor to investigate a specific customer – or a specific ransom note with a bitcoin address. Do you have plain text, but aren’t sure if it contains bitcoin references? You can paste it into the tool to automatically find connected bitcoin wallets.
Chainalysis’s Reactor lets users annotate their findings and keep notes. They can use these notes to identify reappearing offenders, or to share data with other people in your organization.
All data is presented in a visual way, letting customers see the specific connections between threat actors.
The Chainalysis API consists of an in-memory graph database. Chainalysis clusters bitcoin addresses together on-the-fly so users can access the most customizable and accurate measures of risk.
The Chainalysis data API also lets users write their own rules. The Data API contains the source and the destination of funds, allowing users to integrate seamlessly into an existing decision engine.
Who’s Behind Chainalysis?
Chainalysis was founded in 2014. Today, it’s the leading provider of anti-money laundering software for bitcoin.
The company has offices in New York and Copenhagen, and works with major bitcoin exchanges and traditional financial institutions like Barclays. In total, customers have checked over $15 billion in bitcoin transactions using the Chainalysis platform.
Chainalysis also has formal partnerships with Europol and international law enforcement agencies, helping police track criminals around the world.
Key members of the Chainalysis team include Michael Gronager, PhD (CEO and Co-Founder), Jan Moller (CTO and Co-Founder), and Jonathan Levin (CRO and Co-Founder).
Some of the major investors in Chainalysis include Digital Currency Group, Techstars, Point Nine, Trifork, and Converge.
Chainalysis is a blockchain analysis tool that tracks bitcoin transactions on behalf of law enforcement, tax authorities, banks, and businesses. Some of the company’s major clients include Barclays, the IRS, Europol, and several leading bitcoin exchanges.
To learn more about Chainalysis, visit the platform online today at Chainalysis.com