Chainalysis raises $170M to expand its crypto fraud detection platform

Today, blockchain data platform Chainalysis announced it has raised $170 million as part of a Series F funding round led by GIC., a sovereign wealth fund of Singapore The funding brings the organization’s value to $8.6 billion, and will enable it to invest in enhancing its crypto fraud detection platform and scaling its global operations. 

Chainalysis’s platform provides crypto exchanges, enterprises, and government agencies with automated transaction monitoring, risk management and business intelligence analytics they can use to spot crypto fraud and money laundering. 

For organizations, the use of blockchain analytics and transaction monitoring increases visibility over cryptocurrency transactions so that cryptocurrency businesses can identify criminal activity, block the transactions, and comply with the necessary regulations. 

Spotting fraud in a decentralized economy  

The announcement comes as researchers estimate the global blockchain market will grow from $4.67 billion in 2021 to $163.83 billion by 2029 spurred on by the Covid-19 pandemic and the rapid advancement of digital ledger technology. 

“Over the past year, the cryptocurrency industry crossed into the mainstream with financial institutions entering the space and new technologies like NFTs disrupting traditional markets,” said cofounder and CEO of Chainalysis, Michael Gronager. 

With consumer and enterprise adoption of cryptocurrency increasing, crypto providers and enterprises are under increasing pressure from regulators and investors alike to combat fraud. 

Chainalysis’s answer to spotting fraud in an increasingly decentralized economy is to provide blockchain analytics so that enterprises can have a better understanding of how customers use cryptocurrency, which not only helps to identify fraudsters, but can also offer insights into how to enhance the customer experience. 

The top blockchain analytics providers  

Chainalysis is one of the fastest growing blockchain monitoring solutions on the market, now screening an average of $1 trillion worth of cryptocurrency transactions per month and hiring over 450 new employees over the past year to reach a total of 700. 

However, the organization isn’t the only provider that’s using analytics to help exchanges and enterprises identify crypto fraud. 

One of the organization’s key competitors is Elliptic, a blockchain analytics provider that can monitor over 500 crypto assets for signs of fraudulent activity. The organization most recently raised $60 million as part of a Series C funding round, and claims that 66% of total crypto volume runs through exchanges using Elliptic. 

Another competitor is TRM Labs, a digital asset and risk management provider, that monitors crypto transactions with cross-chain analytics, that enable users to monitor funds moving from one cryptocurrency to another, such as from Bitcoin to Ethereum or another blockchain.

TRM supports over 900,000 digital assets across 23 blockchains and most recently announced it had raised $60 million as part of a Series B funding round in December 2021. 

At this point, Chainalysis is aiming to differentiate itself from these providers by expanding the dataset its intelligence solution uses.

For example, the organization recently deepened its coverage to support DeFi identifications that include 100% coverage of the top 15 DEX liquidity pools, while also covering lending and oracle protocols and yield-aggregators. 

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