On Nov 12, 2020, top blockchain analysis firm Chainalysis unveiled a new program aimed at helping government agencies track, manage, and store seized cryptocurrencies.
The program dubbed the “asset realization program” is to aid investigators track and hold seized assets during criminal investigations. The service will also enable authorities to file and sell confiscated digital assets, bringing closure to the illegally acquired funds and flowing them back into the global financial ecosystem.
To develop the new tool, Chainalysis is partnering with Asset Reality, a firm that manages and realizes confiscated assets for public and private sector clients globally. The two companies will develop advisory services for clients on how to sell seized funds and offer training to law enforcement officers in crypto matters.
According to Jason Bonds, the Chief Revenue Officer at Chainalysis, a tool that monitors and stores seized crypto is vital now that cryptocurrencies are more mainstream. He noted that bad actors would likely continue using digital assets, and therefore assisting investigative bodies with asset recovery and realization is a natural next step for his firm.
Chainalysis Sees Rising Demand for Its Investigative Tech
Chainalysis came to the public purview back in 2015, when it helped expose rogue law enforcement agents who stole Bitcoin while investigating the Silk Road darknet marketplace.
Since then, Chainlaysis has seen a growing demand for its investigative blockchain tools, mainly from government agencies such as the FBI.
The blockchain analysis firm was recently involved in a high-profile operation involving the largest ever seizure of crypto assets worth over $1 billion. It offered vital investigative assistance that allowed US authorities to identify the wallets involved in an infamous drug operation connected with Silk Road.
As more law enforcement and government agencies continue to crack down on illicit use of BTC and crypto in general , Chainalyis has benefitted massively in terms of finances.
The firm recently reported that its recurring revenue grew 100% year-on-year in Q3 of 2020. The increased demand for investigative blockchain tech from public sector agencies largely drove this growth.
Company Accused of Privacy Violations
Chainalysis’s close collaboration with law enforcement raises fears that their tools undermine privacy on the blockchain, the main principle that attracts many folks to crypto in the first place.
For instance, the blockchain analysis company recently attracted heavy criticism from the crypto communist for its work with the IRS to trace privacy token Monero (XRM).
Moreover, a New Hampshire resident filed a lawsuit against the IRS in August after the agency worked with Chainalysis to track down tax evaders. The complainant claimed that such a probe was an unlawful violation of his privacy.
Chainalysis CEO Michael Gronager defended these actions, claiming that Chainalysis was actually helping the nascent crypto industry thrive by working with law enforcement and government regulators.