Bitcoin, Cryptocurrency And Blockchain News

Chainalysis Tracks Suspicious Transactions Through KYT Products


The crypto community has faced many challenges such as getting governments to regulate blockchain and cryptocurrency or trying to find ways to make the market flexible and liquid. However, it has also suffered from two other problems: hacking and kidnap jobs. Criminals have been using digital identities to steal from cryptocurrency wallets and exchanges including Coincheck, IOTA, NiceHash and Mt. Gox, and demanding ransom in the form of Bitcoin. Thus, people have turned towards companies that catch these criminals by analyzing wallet and exchange history. One such company is Chainalysis which provides compliance and investigation software for organizations to track and trace transaction user activity.

Chainalysis: Building Trust in Blockchain

The company initially received $1.6 million in seed funding by companies such as Digital Currency Group, Techstars and Founders Club in 2016. The same year, in May, it analyzed a criminal account to find out whether it was preparing for a real DDoS attack on Cloudfare. Chainalysis then worked with investigators in Mt. Gox to search for the coins the exchange lost before the controversial hack in 2017. Due to the company’s efforts, one criminal was successfully located and arrested.

Later, Internal Revenue Services (IRS) hired Chainalysis to find crypto users who were not disclosing their cryptocurrency gains. The company had said, “Our tool has information on 25 percent of all Bitcoin addresses, which account for approximately 50 percent of all the Bitcoin activity; We additionally have over 4 million tags on Bitcoin addresses that we have scraped from web forums and leaked data sources including dark market forums and Mt Gox deposit and withdrawal information.”

KYT Products & Series A Funding

Chainalysis has recently introduced a Know Your Transaction (KYT) product which gives real-time transaction feedback and focuses on the purpose behind the users’ activity. If someone acts suspiciously, companies receive detailed reports of their history which helps them decide what they want to do with the user. Chainalysis completed Series A funding and raised $16 million from Benchmark, as reported on their website on April 6th. They only analyzed Bitcoin companies in the past, however, they have now introduced support for Bitcoin Cash as well. It is expected that they will add more cryptocurrencies by the end of 2018.