Chainalysis lands $16m for real-time crypto compliance tool

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fintech insurtech wealthtech regtech ai cybertech esg news

Chainalysis has launched a new real-time cryptocurrency compliance tool after closing a $16m Series A round.

The investment round was led by Benchmark, with general partner, Sarah Tavel, joining the company’s board. Founded in 2014 by Jonathan Levin and Michael Gronager, Chainalysis has now raised $17.6m in total funding, having landed seed investment from TechStars, Digital Cureency Group and PointNine Capital. Chainalysis provides clients with bitcoin transaction analysis software to help them comply with regulations, assess risk and identify illicit activity.

“When we started Chainalysis in 2014, the connection between the cogs of the financial sector and Bitcoin were grinding together,” the company’s founders said in blog post.

“There was a lot of interest inside banks to get involved in cryptocurrencies but there was no way to put compliance controls in place to meet regulatory obligations for Anti-Money Laundering. We built investigation software that could help cryptocurrency businesses explain to banks the source and destination of customers’ Bitcoin funds.”

Following the funding, the company has launched a new product called Chainalysis KYT (Know Your Transaction).

Chainalysis KYT claims to be the only real-time transaction monitoring solution for cryptocurrencies. KYT raises real-time alerts on incoming and outgoing transactions for links to potentially suspicious activity. It also enables compliance analysts to access updated customer risk profiles with ‘the most up to date information from the blockchain’ for periodic reviews.

The company uses pattern recognition, machine learning and millions of open source references to identify and categorise 1,000’s of cryptocurrency services.

“Anti-Money Laundering compliance is centered around understanding the purpose behind a single transaction or a collection of transactions done by the same user,” the company added. “We have opened KYT to a small group of early customers, and they have already seen a 20x improvement in the speed of account reviews. We’re excited to officially open this solution to exchanges and financial institutions everywhere, which represent the fastest growing segment of our business today.”

Chainalysis is also looking beyond Bitcoin by launching Bitcoin Cash as part of Reactor, the company’s investigation software, for its law enforcement and government customers. It plans to expand to at least 10 cryptocurrencies by the end of the year.

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