Chainalysis – the company that destroyed the anonymity Bitcoin

In most developed countries, active work is under way to introduce rules for the regulation of cryptocurrencies and blocking. In the drafting of bills, they are often assisted by companies to monitor the blockade networks, one of the most famous – Chainalysis. Only in 2017 the company earned about $ 700,000, cooperating with state and law enforcement agencies.

About Chainalysis

Chainalysis was founded in 2014 by Jano Moller, Jonathan Levin and Michael Gronager. The main direction of the company is monitoring blockages and cryptocurrency transactions for combating money laundering and fraud. Companies that provide similar services are many, but almost all US departments, as well as European organizations such as Europol, apply to Chainalysis.

Last year Chainalysis received more than $ 700,000 from the US Department of Homeland Security (DHS), the US Internal Revenue Service (IRS) and the US Immigration and Customs Control Service (ICE) for its work. Also last year, the company was regularly contacted by private organizations, as evidenced by quarterly reports pointing to numerous contacts and partnership agreements.

And one of the regular customers of Chainalysis was the US Federal Bureau of Investigation (FBI), which has repeatedly replenished the company’s accounts over the past few years.


Assistance in investigations

Thanks to cooperation with Chainalysis, the FBI managed to achieve significant results in investigating the actions of the participants of the anonymous trading site Silk Road, as well as learn about the details of the bankruptcy of the Mt Gox exchange. After all, the Chainalysis employees tracked the missing 650,000 bitcoins, which became known during the hearing in the Congress.

In addition, thanks to the work of the monitoring company, in late November 2017, the US federal court ordered the Coinbase exchange to provide confidential data to 14,000 users. Such a decision was made in the light of the investigation by the US Internal Revenue Service (IRS), which suspected that users of the exchange receiving income from the sale of cryptocurrency, in most cases, go away from paying taxes. So, according to IRS data for 2015, the tax on profits from operations with bitcoin was paid only by 802 people.

Influence on Cryptography

The company’s website says that Chainalysis believes in cryptocurrency and blocking technology, and the company’s goal is to provide organizations with tools to prevent fraudulent activities in the sphere of finance, while respecting the right to confidentiality. However, in fact, the company’s blockanalysis services connect specific individuals with specific transactions on the network.

So, thanks to the services of Chainalysis, the IRS, for example, monitors the actions of holders of bitcoins and other cryptocurrencies and monitors the payment of taxes. And this means that transactions with cryptocurrencies, such as bitcoin, can not be considered anonymous. Also, companies that use Chainalysis services receive detailed reports on transactions on the block, their potential customers and partners.

The fact that the company Chainalysis is gaining more and more customers from among the state representatives and structures, worries many members of the crypto community who believe in the future of cryptocurrency without state regulation and the right of everyone to anonymity. However, according to the head of the Hermitage Capital fund Bill Browder, due to the actions of companies such as Chainalysis, cryptocurrencies are becoming an increasingly attractive and reliable way of investing for investors.

Author: Richard Abermann

Regulation of Crypto Market in 2018