This is a guest post by Scott Dylan.
Chainalysis signed an agreement with Europol on Friday that paves the way for the European law enforcement agency to use the New York-based company’s blockchain analytics tools to investigate criminals who use Bitcoin.
The deal between Europol and Chainalysis comes just days after news broke about a high-profile ransomware attack against Hollywood Presbyterian Medical Center. The attacker froze the hospital’s computer systems for 10 days and demanded 40 bitcoins, about $17,000, to restore service. The brazen attack and the hospital’s decision to pay the ransom has renewed the debate about the criminal uses of Bitcoin.
Chainalysis’ blockchain analytics technology enables law enforcement agencies to track such ransom payments through the Bitcoin blockchain, and eventually to identify the culprits.
Law enforcement agencies are not the only ones interested in blockchain analytics. Chainalysis recently contracted with Barclays to provide compliance tools that will allow the London-based bank to work with businesses that operate on the Bitcoin blockchain.
Many banks are prevented from providing services to businesses that accept Bitcoin because the pseudo-anonymous nature of the virtual currency keeps banks from complying with anti-money laundering regulations. Chainalysis gathers and analyses data from the blockchain so that banks can meet their regulatory reporting requirements to ensure that they are not facilitating money laundering or other criminal activities.
Chainalysis is a big player in the fast-emerging blockchain analytics industry. Major rivals include Coinanalytics , Blockseer , Elliptic and Scorechain , which also offer compliance tools for banks and investigative tools for law enforcement agencies.
How the advent of Chainalysis and other blockchain analytics companies will affect the perception of Bitcoin among advocates and users of the virtual currency remains to be seen. If Bitcoin transactions can be tracked and traced as easily as bank transfers, the virtual currency risks losing its appeal […]
