The additions bring Chainalysis’ compliance, regulatory and tracking software – a favorite among federal investigators – to a larger swath of ERC-20 tokens. ERC-20 is crypto shorthand for “Ethereum Request for Comment” – a common set of rules governing tokens issued on the ethereum blockchain.
Blockchain investigations firm Chainalysis has added support for five more ERC-20 tokens, expanding the reach of its anti-money laundering tracking service.
New coins include Basic Attention Token (BAT), OmiseGO (OMG), Dai (DAI), Maker (MKR) and 0x (ZRX). Together, they represented about 0.4% of the overall crypto market cap, and 0.002% of the market’s 24-hour volume at press time, data from CoinMarketCap showed.
Chainalysis “is a de-facto federal standard”, said Casey Bohn, a crypto-crimes specialist with the federally funded National White Collar Crime Center. “That’s what they seem to be using most” to analyze and track crypto transactions.
Jonathan Levin, Chainalysis’ co-founder and chief strategy officer, said the additions help regulators trace illicit tokens – especially ERC-20 tokens on the ethereum network, which he said has become a popular hotbed for hackers to exploit.
In early 2019, hackers cleared out an estimated $16 million in ether and ERC-20 tokens from the now-defunct Cryptopia exchange.
ERC-20 tokens continue to gain popularity, putting pressure on exchanges to list them and increasing the chance bad actors try to steal them. This, Levin said, made the addition of ERC-20 tokens a priority.
“As of this month, there are more than 216,000 ERC-20 tokens found on the Ethereum network. With many end users flocking to get involved, cryptocurrency businesses want to quickly meet this demand.”
The eagle-eyed AML software is popular among crypto exchanges facing stringent global money-laundering safeguards. Last week, U.S. exchange Bittrex began using Chainalysis KYT software to monitor suspicious transactions, joining Binance.
Chainalysis will double its crypto coverage by the end of the year. It plans on adding XRP, ZCash and Doge, among others.
Chainalysis’ ‘Kryptos’ Tool Is an Inside Look for Outside Investors
Chainalysis is building a crypto-space risk data clearinghouse for financial institutions.
Its new Kryptos platform will help institutions parse regulatory hazards and build risk assessment models.
Kryptos “is our step towards financial institutions, so they can have the transparency they need to build risk management programs and integrate into the crypto economy”, Chainalysis co-founder and COO Jonathan Levin said.
It’s the blockchain analysis firm’s first product to specifically target institutional players, joining KYT, the exchange-facing anti money laundering software, and Reactor, which helps investigators trace criminal money flows.
Those products help governments, crypto companies and investigators analyze their sectors of the crypto economy, Levin said. But while those entities grasp the larger crypto ecosystem, crypto-curious investors, including the banks and advisors not already involved, have no clear point of entry.
That could stymie investment. Chainalysis’ solution: build a “trusted and referenced” dataset for new market entrants.
“If you are in a financial institution and trying to understand who the major players are what assets are trading where they are registered, how their activity looks on the blockchain, and how to make sure you’re managing your risk appropriately, you’ll log into Kryptos and see those top counterparties you’ll be wanting to do business with.”
The product, still in beta and set to launch early next year, features a mix of manually-collected data to give them that view. Chainalysis’ employees compile and update reams of regulatory, compliance, and business interest information in one place.
“We find that Kryptos is a good way for someone to get that high level overview, really a good starting point for someone to do a deeper dive investigation.”
That, he claimed, is good for everyone: “All players in the cryptocurrency ecosystem stand to benefit from increased transparency.”