Bitcoins: Why Invest Millions To Monitor One's Exchanges

It is not easy to monitor all the Bitcoin exchanges taking place around the world every day. And it is not Jonathan Levin, a 27-year-old British entrepreneur, co-founder and COO of Chainlysis, who will say otherwise. Indeed, his company is one of the first to have emerged in the flourishing market of virtual currencies. In its early days in 2014, Chainlysis did its best to retroactively control transactions and track the hardest currencies in the blockchain. She worked mainly on behalf of the US government fighting fraud and money laundering. Today, Jonathan Levin, that financial institutions worth several million dollars want to know instantly who they are dealing with scales exchange cryptocurrencies.

That's why a new sector is born. It tries to maintain the confidence prevailing on blockchains by keeping an eye on it at all times and around the world. This promise was illustrated by the announcement of Chainalysis on Thursday, saying it raised $ 16 million (13 million euros) during a first round, especially thanks to Benchmark, the venture capital of San Francisco who had already bet on eBay or Uber. Benchmark has always followed the evolution of cryptocurrency, or at least since 2014, to explore in the storage startup of Bitcoins Xapo and launched an investment fund in Bitcoin.

From blockchain to fraudsters

Initially, the Chainlalysis software was a human-assisted responsive program for making connections between different Bitcoin accounts. He followed the currency to discover potential fraudsters. Today, the program is almost fully automated and it can make decisions about the risks associated with individual accounts in their reference to their transaction history. Thus, companies involved in Bitcoin transactions are certain to deal with legitimate users and not with fraudsters or crooks. Chainalysis offers a new offer, the Know Your Transaction. "This is the Prime Minister who detects the real realities of suspicious activity," said Jonathan Levin. "If you are about to receive the funds, you can decide at the last minute of refusals."

Chainalysis faces some competitors in the market struggling to provide the same services but better. For example, there is Neutrino.nu, created by the former technical director of the surveillance company Hacking Team. Their biggest is Elliptic, a British company that raised $ 5 million in first round in 2016. It also made a second round at the end of last year, attracting the venture capital company SignalFire, according to its CEO James Smith: "We realized that investors are very useful. The cryptocurrency sector in 2017, and we have seen a gain in interest in the sector. " The London-based company is expected to double its workforce to around 50 by the end of the year. She hopes to work for clients such as the FBI (Federal Bureau of Investigation), the DEA (Drug Enforcement Administration) or private companies.

But Chainalysis, listed in the ranking of 50 Forbes FinTechs this year, stands out. And this, thanks to a customer base, including a large number of US government members, the DEA and Customs.

Its software is at the center of important rule-making operations around the world. Police revealed in March that she used Chase to follow the supposed strategists of one of the largest online drug markets, Hansa. The company also helped creditors such as Mt. Gox, which was one of the largest Bitcoin trading platforms, with 650,000 Bitcoins that mysteriously flew in 2014. On the know since 2017, when Jonathan Levin was presented to the US Committee on Financial Services, regarding terrorism and illicit finance.

The Chainalysis CEO says he has tripled the company's revenues last, partly due to an increase in the number of private clients. Barclays is one of its big customers, in addition to numerous Asian, European or American exchanges, from north to south. He did not want to give more names or details about the income.

A de facto reference

Sarah Tavel, General Partner of Benchmark, has joined the Chainalysis Board of Directors. She told company CEO Michael Gronager, the former, by a former lawyer from the US Department of justice, which had used Chainalysis during its investigations. Sarah Tavel now sees the company as a "de facto benchmark" to secure blockchain confidence.

"I think the company is perfectly positioned to influence the ecosystem. It builds a database that no one else can create, "explains Tavel.

As for the future, Chainalysis plans to start following ten more cryptocurrencies than Bitcoin, including Litecoin and Ether. The company will continue to grow and expand its workforce to 70 people between New York, Washington DC and Copenhagen. "We want to maintain our reputation as a reference in the sector," concludes Jonathan Levin.

source : https://www.forbes.fr/finance/bitcoins-pourquoi-investir-des-millions-pour-surveiller-ses-echanges/