Blockchain Data Analysis Company - Chainalysis

Blockchain technology is an advanced database mechanism that allows transparent information to be shared in the business network. The blockchain database will store data in blocks linked to the same chain, and the data will be consistent in time order. , because no one can delete or modify this chain without network consensus. In the world of blockchain, every minute and every second is changing rapidly.

Do you really understand what are the characteristics of blockchain? Why are there criminal problems such as fraud and money laundering on the blockchain? Can we prevent it in advance? Today Mark is going to introduce Chainalysis, a data analysis company on the blockchain. What are the powerful services of Chainalysis, which can protect the safety and security of investors' transactions on the blockchain!

Introduction to Blockchain

Blockchain can be imagined as an electronic ledger open on the Internet, which can be used by everyone, and the records of all transactions will be stored here. To put it in a more academic way, the blockchain is a "decentralized distributed database" that utilizes the technology of cryptographically concatenating and replicating data. In the world of blockchain, miners play an important role, mainly through the principle of Hashcash calculus, to help encrypt the transaction records on the blockchain, and to copy and store them in miners' computers all over the world. Here are the three main features of blockchain:

• Decentralization: There is no third-party organization in the blockchain, but many miners maintain the database together, so even if there is a problem with a miner, it will not affect the operation of the entire blockchain; but in traditional In a bank, if a problem occurs with one operator, it is likely to affect all records.
• Non-tampering: the data on the blockchain cannot be tampered with at all, because the unique technology of the blockchain can put the verified data into the blockchain; in the bank, there is strict supervision on the tampering of data measures, but it cannot achieve the security of block training.
• Anonymity: In the world of blockchain, "English and numbers" are mainly used as codes for presentation. For example, when investing in cryptocurrencies, this transaction record will be a string of garbled characters in English and numbers, which can protect the privacy of users.

Is blockchain safe?

In the world of virtual currency, everyone is anonymous. As long as they have the private key of the wallet, they can control the assets. Many platforms will keep the private key for the user, so that the user only needs to log in the wallet account and password to manage the virtual currency. currency. However, the risk of handing over the only private key that can access digital assets to the platform is very high. Because these platforms are not banks, the information security protection mechanism may be incomplete. Therefore, as long as hackers hack and obtain the private key, they can easily steal huge amounts of money. assets.

According to statistics, the amount of global criminal activities involving virtual currency in 2021 will hit a new historical record of US$14 billion, a significant increase from US$7.8 billion in 2020, of which more than US$2.8 billion is a “Rug Pull” absconding scam. On the surface, the establishment of a legal and compliant DeFi protocol issued coins, but suddenly the money was withdrawn and disappeared when it was halfway through.

And many of them are loopholes in smart contracts and code. As long as it is profitable, hackers will desperately exploit these loopholes to defraud virtual currency. In addition, due to the characteristics of blockchain, many criminal groups used virtual currency as the main ransom. For example, in the end of 2020, Hon Hai was subjected to extortion attack, and hackers threatened to deliver 1,804 bitcoins as a ransom, which also made virtual currency even more notorious.

In this way, the new digital crime on the blockchain is a very difficult topic for global law enforcement agencies. In addition to the relevant background knowledge, the use of services and technologies on the blockchain is also rapidly updated. In order to solve these problems, the responsibility It also gradually fell on some professional institutions.

Company Profile

Chainalysis is a blockchain data platform that provides automated transaction monitoring, risk management and business intelligence analysis for cryptocurrency exchanges, corporations and government agencies to detect cryptocurrency fraud and money laundering. It currently provides data, software, services and research to government agencies, exchanges, financial institutions, and insurance and cybersecurity companies in more than 70 countries. Chainalysis data powers and assists investigative, compliance and market intelligence software that has been used to solve some of the world's criminal cases and enable consumers to use cryptocurrencies safely.

Cryptocurrencies have opened up new markets and made the global economy bigger, fairer, and more deeply integrated, Chainalysis observes what this transformative technology has to offer, but cryptocurrencies require greater trust and transparency to achieve Realizing its full potential, this is where Chainalysis comes in, by creating clear regulations, establishing standard auditing practices, and implementing robust compliance controls for cryptocurrencies to sustain their current growth and integration into the global financial infrastructure.

Service Content

1. Cryptocurrency investigation and related cooperation plans

Chainalysis leverages expertise to conduct sophisticated blockchain analysis and investigations. Chainalysis's team of professional investigators, cybersecurity experts, and data engineers stands ready to help clients respond to cybersecurity breaches, ransomware attacks, recover stolen cryptocurrencies, and perform other analyses involving blockchain data.

Chainalysis's ISP team works closely with private sector businesses and public sector agencies, including financial regulators, law enforcement, national security and tax authorities. Leverage flexible engagement methods to meet client needs and combine software tools and data to bring deep expertise.

2. Response to cryptocurrency crime incidents

Chainalysis provides the Canadian currency incident expertise and investigative capabilities needed to recover lost funds in the event of an incident involving cryptocurrency theft or demand, such as a cyberattack or unauthorized network intrusion.

While crime is an ever-smaller share of all cryptocurrency activity, some forms of cybercrime, including ransomware and theft through hacking, remain rampant, raising national security concerns and reducing interest in Trust in cryptocurrencies and victimize innocents around the world.

Chainalysis can prepare for unpredictable situations and is ready to act quickly in the event of an event to minimize client losses and work to recover associated funds.

3. Certification Program

Giving investigators, compliance officers, analysts, and regulators access to cryptocurrency fundamentals, the Chainalysis Cryptocurrency Foundation Certification is designed for newcomers to cryptocurrencies. Whether you're just starting a career focused on cryptocurrency, or you're encountering cryptocurrency while conducting an investigation, joining a new business, or developing a cryptocurrency compliance policy, relevant certifications are available, including Chainalysis Reactor and Chainalysis KYT (know your transaction) authentication.

How to become a leader in blockchain analytics?

Chainalysis signed a $9,000 data software contract with the FBI in 2015. However, just 5 years later, Chainalysis has become the Palantir of the cryptocurrency industry (a data analytics company with a large software contract with the U.S. government), with which Chainalysis does multi-million dollar business each year , has become a leader in the emerging blockchain monitoring industry.

Chainalysis is currently the largest cryptocurrency data analysis contractor in the United States and has partnered with as many as 10 federal agencies, departments and offices. In short, federal agencies want to make sense of the complex web of transactions in bitcoin and other cryptocurrencies to fight crime of all kinds, and they're going to spend a lot of money. Since Chainalysis was founded in 2015, federal agencies have invested at least $10 million in Chainalysis tools, services and training, and Chainalysis has earned more than $14 million in revenue given the contract extension.

No company currently matches Chainalysis in terms of the number of contracts signed with the U.S. federal government, nor can it be compared in terms of the number of partner institutions. After signing a contract with Chainalysis, the U.S. federal government can effectively prevent people from exploiting cryptocurrencies. to evade scrutiny, such as Bitcoin is a pseudo-anonymous system with inherent traceability - a network in which billions of dollars of value are transferred, and these value transfers are recorded on a public ledger , anyone can track it.

In 2015, Chainalysis worked with only two federal agencies, the FBI and the IRS. Today, Chainalysis has contracts with a number of federal agencies, including: the Federal Bureau of Investigation, Drug Enforcement Administration, Immigration and Customs Enforcement, as well as financial institutions affiliated with the Securities and Exchange Commission, the Commodity Futures Trading Commission, the Financial Crimes Enforcement Network, and The Internal Revenue Service, the Secret Service, the Transportation Security Administration, and even the Air Force.

Current status of Chainalysis

2021: Working with the government

With the increasing popularity of blockchain technology, the U.S. government has also noticed money laundering cases involving illicit financial flows through cryptocurrencies. In response, the Office of Foreign Assets Control (OFAC), which is part of the U.S. Department of the Treasury, has reached a partnership with blockchain data analysis company Chainalysis, hoping to crack down on on-chain cases. According to official documents released by the U.S. government, OFAC and Chainalysis have officially cooperated in order to improve the means of supervising the financial flow of the blockchain. Efficient.

In order to prevent terrorists, international drug dealers, and communist officials violating human rights, OFAC will put all financial accounts of those who violate the law on the sanctions list. Although the flow of money on the blockchain has always been a difficult project to trace, through cooperation with Chainalysis In cooperation with OFAC, OFAC hopes to effectively analyze and trace the relevant financial situation in the future.

For the software services provided by Chainalysis, OFAC is even more praised. In the official document announcing the cooperation news, many functions supported by the system are mentioned, including account analysis, cash flow tracking and charts, and even user behavior analysis. Analyze user preferences for exchange rates, transactions, and market data and other related functions.

2022: Launch of new services

Blockchain data analysis company Chainalysis has launched “Chainalysis Storyline”, a blockchain analysis tool designed for Web3, which aims to visualize smart contract transactions including DeFi and NFTs. It provides a holistic view of all money flows for cross-chain transactions at an address, allowing investigators to focus on the most important transactions and funds. It also analyzes smart contracts and automatically flags common transaction types such as NFT purchases or asset transactions.

2022: The State of Valuation

Chainalysis announced that it has received an investment of US$100 million, with a valuation of US$1 billion, becoming a new unicorn in the blockchain field. Investors include Addition, which led the investment, and original shareholders Accel, Benchmark and Ribbit Capital.

Chainalysis raised $170 million in a Series F round led by GIC, with other investors including Accel, Blackstone, Dragoneer, FundersClub, Bank of New York Mellon and Emergence Capital, bringing its valuation to $8.6 billion.

According to Chainalysis, the number of customers has increased by 75% in the past year and now has more than 750 customers in 70 countries, of which the financial services customer base has tripled to more than 100 financial institution customers.

Mark's thoughts

Since the birth of blockchain technology, the legal and criminal problems derived from cryptocurrencies have continued to increase, and various countries have enacted legislation or set up special agencies to strengthen the supervision of cryptocurrencies, but Taiwan is still only responsible for the relevant money laundering prevention business by the Financial Supervisory Commission , there is no competent and regulatory authority, this result has made the prevention and control of related financial crimes more difficult.

Due to the attention of other countries, the crime prevention industry has been able to develop. Although Taiwan has gradually joined the industry, it is not as fast as the increase in related crimes. What's more, the problems arising from cryptocurrencies cannot be solved by a country or a region alone, but must cooperate with many countries to prevent and control related crimes. The Investigation Bureau of the Ministry of Justice of Taiwan is also actively involved in related crimes. Cooperation, but if it is a more complete and complete ecology and system to cooperate, I believe it can more effectively prevent related problems from happening.