New York-Based Chainalysis Inc., has signed a joint memorandum with Europol’s European Cybercrime Centre (EC3) to help battle online criminal activity. The partnership coincides with the company receiving a $1.6 million USD seed fund from investors.
Also read: New UK Cybercrime Report Makes No Mention of Bitcoin
Chainalysis Using the Blockchain to Fight Crime
Chainalysis was founded in 2014 by Jonathan Levin, Jan Moller, and Michael Gronager with the goal of “[spotting] connections between digital identities.” In the press release, the company says it aims to help track this data on the blockchain.
The company’s software distinguishes suspicious patterns in real time and provides law enforcement information. The Memorandum of Understanding (MoU) with Europol establishes a new partnership with the investigation unit and “cutting edge private sector technology.” Michael Gronager, CEO of Chainalysis stated in the announcement:
“We have worked extensively with regulated entities and law enforcement agencies in the US, Asia, and Europe to help protect people and businesses from cybercrime attacks. This new collaboration is an important next step in the endeavour to move digital currencies out of the hands of the criminals and into the hands of consumers and blooming commerce.”
Europol says cybercrime is on the rise as well as criminal activity using cryptocurrencies. The law enforcement agency believes the technology has the potential for many industries and applications. However, it also has received negative attention from these currencies being tied to fraud and extortion attempts. Most notably, distributed denial-of-service (DDoS) attacks and crypto-locker malware were frequently used in 2015, “often extorting their victims in Bitcoin.”
The crime unit believes Chainalysis has the technical applications to help fight this cyber-battle. Steven Wilson, Head of Europol’s EC3 explains:
“Chainalysis brings a level of expertise that will be of significant benefit to our Europe-wide investigations. I look forward to developing a rewarding partnership that will make the people and businesses of Europe safer online.” — Steven Wilson, Head of Europol
The blockchain detectives have also been fancied by investors who’ve injected 1.6 million into the firm’s holdings. Chainalysis’ seed round was funded by Techstars, Digital Currency Group, Point Nine Capital, Converge VP, and Funders Club. The company says this is a milestone for blockchain technology by connecting it with regulated finance.
Despite working directly with law enforcement, the startup still believes in privacy. Jonathan Levin, co-founder of Chainalysis, said, “We believe in a future of protecting civil liberties without sacrificing our right to privacy. Enabling regulation through greater transparency, will have much larger consequences beyond just financial transactions.”
Authority figures globally are worried about the rise of cybercrime and are eager to follow the criminals trail. The blockchain is a public ledger and viewable for the entire world to see and software is being deployed to follow its operations. As time progresses, more analysis firms will likely come into play as blockchain technology and cryptocurrencies become more popular. Chainalysis wants to lead the way by monitoring its activity and give law enforcement an advantage.
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Images courtesy of Chainalysis, Shutterstock, and Pixbay