The world of cryptocurrencies was in shock when in 2014 the Japan based cryptocurrency exchange, Mt. Gox suddenly collapsed after millions of dollars worth of Bitcoins disappeared from the exchange. This was a great source of anguish for all those who had lost their cryptocurrency assets without much warning and shook the whole ecosystem. At the time, most of the global transaction volume in the world of cryptocurrencies was going through Mt. Gox. It was the biggest cryptocurrency exchange in the world.
An Opportunity In The Tragedy
As problematic as the whole Mt. Gox debacle was for most of the cryptocurrency world, a small group of people saw this as an opportunity for something big. The COO of the Bitcoin exchange Kraken and an economist from Oxford who had been working on cryptocurrencies in the academic field had already been in discussion about the possibility of coming up with software that can trace transactions which have been made on blockchain networks in a bid to aid law enforcement. This idea by Michael Gronager and Jonathan Levin culminated into the formation of Chainalysis, a cryptocurrency intelligence company which was hired to find all of the missing cryptocurrency units that were stolen.
Success For Chainalysis
Chainalysis was a very small company back then and it managed to crack open the case within a couple of months. The theft was the crime of a Russian cybercriminal who has since been tracked in Greece and arrested last year.
The blockchain detective company has come a long way since then with offices in New York, Copenhagen and Washington, DC. The company has recently received funding of $16 million by Benchmark. This recent addition to their funds will take Chainalysis to the next level and help them improve their efforts. The number of cryptocurrencies this cryptocurrency intelligence agency will now be tracking is going to increase.
Along with the announcement of the significant funding the company has raised, it also introduced their latest product, KYT (Know Your Transaction). This is going to be used by financial authorities and banks to track suspicious activities being done using cryptocurrencies, and ensure compliance with laws governing money-laundering activities.
Chainalysis Is Not Just For Law Enforcement
While the company was initially made in order to assist law enforcement agencies and its help has been employed by agencies like the FBI, the DEA, Europol and the IRS, it has since expanded its horizons to cater to the world of financial institutions. It will help financial institutions keep a track of any money laundering activities and serve as the compliance tool that they had long been in search for in the world of cryptocurrencies.
In Conclusion
Even though most of the investigative efforts by Chainalysis until now have been towards one cryptocurrency and its blockchain network – Bitcoin – Chainalysis is going to use the extensive funding it has received from Benchmark to introduce more tools which will allow the tracking of over 10 different cryptocurrencies which will start off with Bitcoin Cash, a hardfork of Bitcoin from the 6th of April.
With the downturn in the world of cryptocurrencies not affecting the growth of this company, it is slated to become more successful with coming years and become an integral tool for enforcement of regulations in the world of cryptocurrencies.
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