Cryptocurrency Crimefighter Chainalysis Becomes First Blockchain Company To Make Next Billion-Dollar Startups List

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How Next Billion-Dollar Startup Chainalysis is cracking crypto crime: by DelRayMan

Two years ago, Jonathan Levin testified in front of a U.S. financial services panel that his little-known company, Chainalysis, had located 650,000 missing bitcoin stolen from Mt Gox, then the largest cryptocurrency exchange in the world. His sleuthing uncovered $1.2 billion in bitcoin that investigators thought was lost for good. Not so, Levin told the stunned panel. He had found the money—and Chainalysis had found its calling as a tool to crack crypto crime.

Levin then found that the patterns Chainalysis can identify are good for more than just tracking down crime after the fact. The startup launched a new tool designed to help money processors and traditional banks automatically comply with regulatory requirements, such as verifying the source of a client’s funds, as they increasingly open accounts for cryptocurrency companies.

“We’re now helping banks understand how they can build programs to allow cryptocurrency businesses to access banking services but also make sure there’s no illicit activity going on,” says Levin, 29, an honoree ofHackers made about $1 billion last year hacking exchanges, according to a Chainalysis report. Holders of bitcoin and other currencies evaded an estimated $25 billion in U.S. tax liabilities, says to research firm Fundstrat Global Advisors.

Chainalysis’s business today is split between crime fighting and regulatory compliance. Levin says half the company’s revenue comes from working with state governments and regulators including the Internal Revenue Service and the Federal Bureau of Investigation to provide investigation software. The Bank of Montreal used Chainalysis’s software to investigate human trafficking.

 

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