Founded in 2014, Chainalysis has made a name for itself championing trust and transparency in the blockchain space. More specifically, Chainalysis develops software and actionable insights to assist legacy institutions with integrating decentralized technologies. Additionally, Chainalysis aims to build trust between parties and creating reliable compliance standards with minimal risk. As if this wasn’t enough, Chainalysis has assisted in some of the most high-profile criminal cases in the blockchain industry. Chainalysis’ 2022 Crypto Crime Report highlights the breadth of research and analysis the firm has undertaken over the last twelve months, along with a detailed breakdown of illicit on-chain activities.
In this article, we’re going to dive deep into the Chainalysis blockchain analytics firm. We’ll discuss how Chainalysis is helping governments and financial institutions to integrate blockchain. Also, we’ll explore some of the core products and services the company has to offer. In addition, we’ll take a look at Chainalysis 2022 Crypto Crime Report and discuss the ways Chainalysis examines criminal activities in the world of Web3.
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What is Chainalysis?
Chainalysis is a blockchain data and software service provider that creates tools and research for government agencies, crypto exchanges, and financial institutions. As one of the leading blockchain analytics firms globally, Chainalysis works with regulatory bodies to develop industry standards in auditing and compliance to help legacy financial institutions to integrate blockchain technology. Also, Chainalysis develops products for insurance providers and cybersecurity firms in more than 60 countries.
Chainalysis is responsible for creating some of the industry’s most widely-recognized compliance and investigation tools. Further, the company develops investigation and market intelligence software that has helped to solve some of the most high-profile criminal activity on the blockchain. As new sectors transition into the world of Web3, Chainalysis is paving the way for frictionless compliance and regulatory clarity.
Co-founder and CEO Michael Gronager received a Ph.D. in quantum mechanics before co-founding Kraken’s crypto exchange in 2011. In 2015, Gronager left Kraken to establish Chainalysis. The venture aimed to create a platform that enables governments and financial institutions to reduce the threat of cybercrime and stolen funds when interfacing with public blockchains.
How Does Chainalysis Work?
Chainalysis provides blockchain data and analysis services for over 500 institutional customers. This includes the United Nations (UN) Office on Drugs and Crime, the US Department of Justice, the World Economic Forum (WEF), the Internal Revenue Service (IRS) Criminal Investigations team, Gemini, and Square. Below, we’ll take a closer look at the three core client bases the company serves.
Chainalysis provides businesses with bespoke compliance solutions to streamline the regulatory workload. As such, teams can operate with peace of mind and a dedicated account management team. Also, businesses have access to investigation and compliance experts to assist in creating a robust compliance framework.
Integrating blockchain into existing financial infrastructures comes with several risks. Chainalysis enables banks and financial institutions to access the same data regulators use to minimize risks and facilitate compliant growth in the emerging crypto economy. Also, teams gain access to a broad range of tools to investigate various complex threats and manage risk exposure.
Chainalysis provides government agencies with actionable insights to help bring criminal organizations to justice. Criminals constantly find new ways to evade the law and conceal nefarious activities. However, Chainalysis develops industry-leading investigation tools to help government agencies identify on-chain activity and contextualize data relating to terrorism, sex trafficking, and money laundering.
Chainalysis has developed some of the most cutting-edge blockchain analytics tools. Now that we’re familiar with the types of clients Chainalysis serves, let’s take a closer look at some of the products and services the company offers and how they benefit clients.
The Chainalysis Business Data tool helps cryptocurrency businesses to gain a better understanding of their customer base, create new revenue streams, and develop new Web3 products and services. It provides actionable insights that help businesses to make data-driven decisions, improve customer experiences, and optimize marketing strategies. Also, the Chainalysis Business Data arm plays an essential role in many of the other product offerings mentioned below.
Know Your Transaction (KYT)
Chainalysis’ KYT (Know Your Transaction) provides next-gen blockchain intelligence with a real-time application programming interface (API) via a sleek and straightforward user interface. Clients gain access to tools that help to optimize manual workflows and remain compliant with global regulatory bodies. Also, Chainalysis KYT provides a safe on-ramp to the world of Web3 and decentralized finance, and adds more than 100 new services each week.
Furthermore, Chainalysis KYT maps blockchain wallet addresses to real-world entities. This helps identify illegal activities, dark web markets, scams, and ransomware. Also, clients benefit from continuous transaction monitoring to help detect high-risk activities. Plus, users can configure real-time alerts to meet the specific demands of anti-money laundering (AML) policies. Accordingly, clients can prevent transactions from sanctioned addresses and freeze wallets involved with ransomware attacks.
In addition, Chainalysis KYT helps organizations to build investigations and link real-world events to on-chain activity. Clients can also optimize alerts to warn against predefined behavioral patterns and create a complete audit trail to share with regulators and financial institutions.
The Chainalysis Kryptos service gives businesses access to a wealth of trusted on-chain data. Clients can use this tool to monitor the activity of over 6,500 services and make informed decisions about potential industry partners. Kryptos enables clients to create an on-chain profile of other businesses and provides insights into the different levels of risk exposure taken on by various entities.
Before entering into a strategic partnership, businesses can compare the risk exposure of a business to other businesses. Plus, clients gain access to the same data used by regulators and law enforcement. Chainalysis has been collecting data from blockchain services for longer than any other analytics firm. Accordingly, this data is among the most widely-trusted data available in the blockchain industry.
Chainalysis Market Intel provides unique market insights and data to assist in research and investment throughout the Web3 realm. Users receive all of the tools needed to conduct thorough research and make investment decisions based on real-world data. Also, Chainalysis Market Intel service helps clients to develop data-driven investment strategies using a proprietary dataset that Chainalysis has been building since 2014.
Clients gain access to state-of-the-art metrics that indicate how movements of crypto assets can trigger market-wide events. These tools help users to assess the ideal buying and selling opportunities. Plus, they provide an up-to-date visualization of blockchain trends.
Chainalysis Reactor is a cryptocurrency forensics tool that enables users to investigate criminal activity and provides actionable insights into the movement of assets. This investigation software maps hundreds of millions of crypto wallet addresses to real-world entities. It allows users to enter any crypto wallet address and paints a picture of related wallet addresses and activity.
Clients gain insights into mining pool activities, merchant services, and thousands of social media forums. Plus, Rector makes it simple to identify malicious activities on-chain. In addition, Reactor enables users to set watch reminders for investigations to monitor future transactions on-chain. It requires little training and helps to expedite analysis to untangle complex on-chain obfuscations efficiently.
Chainalysis Professional Services
Chainalysis’ professional services provides a team of expert investigators for the most complex and nuanced on-chain investigations. This advanced blockchain forensics service streamlines theft and cybersecurity investigations and gives clients access to the highest-quality analysis tools available.
Furthermore, this service offers bespoke reporting for financial institutions, crypto exchanges, and government agencies for various investigation scenarios. Chainalysis has investigated some of the most prominent cases in the industry and has aided government agencies worldwide.
Chainalysis certification programs allow clients to train to become certified blockchain compliance officers and regulators. This program offers various certifications. This includes the Cryptocurrency Fundamentals Certification (CCFC) for beginners and the Chainalysis Reactor Certification (CRC) for on-chain analysis. Also, the Chainalysis KYT Certification (CKC) teaches clients how to develop their own compliance strategies. Plus, the Chainalysis Investigation Specialist Certification (CISC) covers advanced investigations and obfuscation methods for Chainalysis Reactor users.
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The Chainalysis 2022 Crypto Crime Report: What is it?
Chainalysis’ 2022 Crypto Crime Report is a 140-page analysis of crime related to crypto. The report covers money laundering, darknet markets, terrorism financing, malware, theft, and more. According to the report, illicit crypto transaction activity reached an all-time high in 2021, with Illicit crypto wallet addresses receiving around $14 billion, almost double the amount received in 2020. However, the report also states that illicit transactions reached an all-time low in the overall share of crypto activity.
According to the report, the total transaction volume in the crypto markets during 2021 was $15.8 trillion. This marks a 567% increase from 2020. Naturally, this increase in volume correlates with an increase in cybercriminals using cryptocurrencies. That said, the report shows that the overall growth of legitimate cryptocurrency usage outpaces the increase in illegal usage. Moreover, illicit activity has never accounted for such a small percentage of the overall crypto transaction volume.
The report also shows that money laundering is largely concentrated across a few small centralized exchanges. Although the DeFi landscape has seen an increase in money laundering activities, centralized crypto exchanges are the number one destination for channeling funds illegally.
Chainalysis 2022 Crypto Crime Report offers a wealth of insights into the different ways criminals can use cryptocurrencies for illicit means. Despite the apparent rise in blockchain-related crime, the report suggests that regulators and government agencies have access to higher quality analytics and on-chain data than ever before.
Chainalysis: Exploring the Crypto Analytics Company – Summary
Chainalysis provides world-class blockchain analysis and research tools for the crypto industry, financial institutions, and government agencies. As institutional crypto adoption continues to grow exponentially, the ability to prevent hacks, breaches, and loss of funds is more valuable than ever before. Chainalysis has aided some of the most high-profile criminal cases the industry has seen and continues to push the boundaries of blockchain analysis.
Chainalysis 2022 Crypto Crime Report displays the extensive research and analysis for which the company has become so well known. In the future, we can expect Chainalysis to play an increasingly prominent role in defining the parameters of the regulatory landscape. Despite the mixed opinions regarding regulation, Chainalysis is developing state-of-the-art compliance solutions to help connect legacy institutions with the Web3 realm.
For blockchain to achieve mass adoption, institutions need a clear and robust regulatory framework. Chainalysis aims to be the first name in blockchain analytics and provide the foundations for compliant, mainstream crypto adoption. Moreover, Chainalysis is equipping organizations with premier tooling to help navigate the world of Web3 without friction.