The blockchain analytics firm launched Chainalysis Government Solutions, a subsidiary focused on helping US government agencies investigate crypto-related crimes. According to the firm’s latest research, 75% of public sector agencies worldwide are under-prepared in terms of tackling crypto incidents, demonstrating an increasing need for relevant resources and technologies made available to investigators.
After striking up deals with the US government worth tens of millions, Chainalysis has doubled down its efforts to support public agencies’ crypto investigations by providing data tools and advanced technology to track blockchain transactions.
In 2020, the firm signed a $625K contract with IRS to develop a tool for tracking privacy coins like Monero and second-layer solutions like Lightning Network, given that the authority aimed to detect and track illicit crypto transactions.
Chainalysis’ latest blog post outlined four major solutions the team will offer to the US agencies. In particular, the firm will integrate “the industry’s best software tools and data” and on-chain analysis to provide insight for government bodies.
With the noticeable surge of crypto crimes in the past years, governments’ crypto investigations have stretched far beyond the use of bitcoin in illicit markets, even targeting areas of ransomware attacks, nation-state hacking, and more, noted Chainalysis CEO Michael Gronager.
The firm also hinted that, due to the newly added division, its total headcount might be set to double from its current size of 110 employees – including 90 forensic investigators – in the next six to twelve months. The analytics giant reached a valuation of $8.6B after raising $170M in May.
The new government-focused subsidiary comes into shape in the context that 74% of the employees at public agencies said their organization isn’t well-equipped to investigate crypto-related crimes, according to a recent survey conducted by the firm.
In addition, with the rise of DeFi activity – which is more challenging for investigators to probe into – many public agencies did not adopt specialized blockchain analytical tools for relevant investigations.
Chainalysis polled 300 respondents across 183 public sector agencies in the United States and Canada as it tried to dive into crypto investigations by the public sector. The report found that the most commonly investigated crypto-related crimes center around scams, fraud, drugs, cybercrime, and ransomware.
On average, respondents rated their understanding of cryptocurrency at 58 – on a scale from 0 to 100 from not knowledgeable to extremely knowledgeable – crypto education is also needed within the public sector. Thus, better tools and relevant support are in shortage for employees of public agencies to monitor, track, and investigate crypto-related cases, the report concluded.