Be Ready for More Crypto Surveillance as Chainalysis Moves Into Crime Prevention
The never-ending battle between privacy advocates and blockchain analysis companies that cooperate with governments and law enforcement is about to take a new turn that might hurt the privacy of blockchain users even further.
Major blockchain analysis company Chainalysis announced that it "is evolving—from investigations to crime prevention." The company didn't provide any other details about this transition, only announcing that its CEO, Jonathan Levin, will share the company's plans at the Links 2025 Digital Premiere virtual events series. It begins with the Americas-focused event on April 30.
The company is also promising to "unveil exciting new innovations" and next-generation solutions for investigations, streamlined compliance workflows, fraud prevention strategies, and proactive on-chain security measures.
While blockchain analysis companies, including Elliptic, TRM Labs, and others, are indeed instrumental in helping law enforcement catch criminals and recover stolen funds, their activities are also no stranger to controversies.
For example, as first reported by The Rage in March, Chainalysis has been sued once again, this time for 'propping up' a fraudulent $3.3 billion audit of the now-bankrupt major crypto lender Celsius Network. Now, the debtors, led by Van Eck Absolute Return Advisers Corp., a subsidiary of the major investment firm Van Eck Associates, claim that Chainalysis helped to mislead Celsius' customers and investors.
"Chainalysis, a supposed authority in blockchain analytics, knew the truth but willingly lent its credibility to the Insiders’ lies—misleading both the public and Celsius," the lawsuit claims. The blockchain analysis company has yet to respond publicly to these accusations.
However, in October 2024, a U.S. court dismissed a crypto project's defamation lawsuit against Chainalysis, ruling that the company had acted in the public interest.
Separately, Chainalysis today also revealed it helped the Spanish National Police in its Operation Bonanza, which earlier this year disrupted an international crypto Ponzi scheme that defrauded over 50,000 victims. The company says that its analytics and training helped authorities trace, freeze, and recover $21 million in illicit cryptoassets that were transferred to government-controlled wallets and are now under the jurisdiction of the Spanish National Court. In total, the company claims it helped seize and freeze more than $12.6 billion worth of cryptoassets.