Chainalysis Launches Government-Focused Team Offering Cryptocrime Solutions

Chainalysis Launches Government-Focused Team Offering Cryptocrime Solutions
Chainalysis Launches Government-Focused Team Offering Cryptocrime Solutions

The blockchain analytics firm launched Chainalysis Government Solutions, a subsidiary focused on helping the US government investigate crypto-related crimes. According to the firm’s latest research, 75% of government agencies worldwide are underprepared when it comes to dealing with crypto incidents, demonstrating a growing need for relevant resources and technologies made available to investigators.

Public enterprises

After signing deals with the US government worth tens of millions, Chainalysis has redoubled its efforts to support government agencies’ crypto investigations by providing data tools and advanced technology to track blockchain transactions.

In 2020, the firm signed a $625K contract with the IRS to develop a tool for tracking privacy coins like Monero and second-tier solutions like the Lightning Network, given that the agency aimed to detect and track illegal crypto transactions.

Chainalysis’ latest blog post outlined four major solutions the team will offer to US agencies. In particular, the firm will integrate “industry-leading software tools and data” and supply chain analytics to provide insights for government agencies.

With the noticeable increase in cryptocrime in recent years, governments’ crypto investigations have extended far beyond the use of bitcoin in illicit markets, even targeting areas of ransomware attacks, nation-state hacking and more, noted Chainalysis CEO Michael Gronager.

The firm also indicated that due to the recently added division, the total number of employees could be doubled from the current size of 110 employees – including 90 forensic investigators – in the next six to twelve months. The analytics giant reached a valuation of $8.6 billion after raising $170 million in May.

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Government agencies

The new government-focused subsidiary comes as 74% of government agency employees said their organization is not well-equipped to investigate crypto-related crimes, according to a recent survey conducted by the firm.

Additionally, with the rise of DeFi activity – which is more challenging for investigators to investigate – many government agencies did not adopt specialized blockchain analysis tools for relevant investigations.

Chainalysis polled 300 respondents across 183 government agencies in the US and Canada as they attempted to delve into public sector crypto research. The report found that the most investigated crypto-related crimes revolve around fraud, swindling, drugs, cybercrime and ransomware.

On average, respondents rated their understanding of cryptocurrency at 58 – on a scale of 0 to 100 from not knowledgeable to extremely knowledgeable – crypto education is also needed within the public sector. Thus, there is a lack of better tools and relevant support for employees in public agencies to monitor, track and investigate crypto-related matters, the report concludes.

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