Blockchain Startup Chainalysis Raises $16M in Series A Funding to Release New Real-Time Cryptocurrency Compliance Tool

Blockchain startup Chainalysis released a new real-time cryptocurrency compliance tool today, and also announced the completion of a $16 million Series A funding round from Benchmark Capital.

Founded in 2014, Chainalysis mainly provides bitcoin transaction analysis software for cryptocurrency exchanges, international law enforcement agencies, and other customers to help them comply with compliance requirements, assess risks, and identify illegal activities. It is worth mentioning that the company has helped investigate the bankruptcy of Mt.Gox.

The company’s co-founder, Michael Grongager, who previously served as chief operating officer of cryptocurrency exchange Kraken, said:

“We started Chainalysis to bring the new financial world and the old financial world together. Basically, we want to be a bridge between Bitcoin and traditional banks.”

More specifically, Jonathan Levin, another co-founder of Chainalysis, explained that they have built a database designed to link cryptocurrency transactions to real-world activity so that we can discover the real-world purpose of these anonymous transactions. .

Until now, Chainalysis' software only allowed clients to analyze transactions retrospectively, and its new tool, called "Chainalysis KYT," will provide real-time analysis of cryptocurrency transactions.For example, Jonathan Levin said,Cryptocurrency exchanges can now instantly know if they are dealing with a trusted financial institution, or a suspicious entity. Exchanges can then use this information to determine whether deposits and withdrawals can be processed on their platforms.

Levin said the rapid expansion of the cryptocurrency industry has made the software a "necessity," adding:

“When we were doing business, the exchanges were much smaller, and they could use human review, or have the appropriate type of trades, and they could follow the rules. But now, these exchanges have a lot of Customers log in, so there will be millions of customers who need automated tools to process reviews and surveys, and those jobs can’t take more than 30-45 minutes.”

It is reported that Chainalysis has started working with several customers to start a trial run of this new tool, and it is reported that their investigation speed has increased by 20 times.

Previously, Chainalysis’ software only supported the bitcoin blockchain, but they have now said they will launch a bitcoin cash-compatible tool for law enforcement and government clients. Additionally, the company said it will support 10 other cryptocurrencies by the end of the year.