Dear crypto investors,
the blockchain intelligence firm Chainalysis has reached the - in the cryptospace very rare - unicorn status, after they raised additional 100m$ in funding and now topped the 1 bn$ market capitalization. It is quite remarkable that the market for analyzing blockchain transactions is that huge (in comparison coinmarketcap is worth "only" 500m$).
Chainalysis was founded in 2014 and its mission is to "increase transparency and regulatory insight and oversight on cryptocurrency markets" and DeFi protocols. Revenues in 2018 were 8m$ (more than doubling from previous year) and in 2019 already >22m$.
They provide market intel (example here) and sell data solutions and software platforms to government bodies, financial institutions (mainly exchanges) and other companies (e.g. recently they audited Celsius Network). Their main customers, exchanges, need that software to fulfill the ever increasing government requirements regarding transparency, and the governments want to track down criminals via their blockchain transactions. E.g. Chainalysis works together closely with the US government in confiscating illegal money (they recently helped to confiscate a wallet in connection with silkroad which had 70.000 BTC in it!). A huge success story for both of them.
Due to a strong branding and clever marketing Chainalysis was able to establish itself as market leader in a small, but significant niche and as part of the actual infrastructure of crypto companies, similar like counsels or server infrastructure (but with much more centralization). They present themselves as "enabler", helping exchanges to prevent getting banned by regulators, a kind of white-washing service.
On the other hand they educate regulators about cryptos. This surely is good as it may prevent a ban of cryptos (if you don´t know it you don´t want it), but the more governments know about cryptos, the more effective they might be in the control of it - and maybe in its suppression.
As such this business model is quite a double-edged sword. Chainalysis says it is "pro-crypto" and criminal transactions make up only a tiny part of all blockchain transactions. Their analyses track down criminals and make the crypto world more transparent and "clean". But among the Bitcoin and crypto scene they are reckoned as traitor of the great idea of Bitcoin and others: privacy. For them Chainanalysis is a parasite, damaging this idea for profit.
Chainalysis doesn´t care. They found their market and it seems they are staying for good.
What do you think? Is more transparency better for all? Or will the continous education of governments ultimately kill our big dream of fully decentraliced finance and freedom from the current fiat money system?
Sources:
https://www.fintechmagazine.com/technology-and-ai-2/series-c-pushes-chainalysis-unicorn-status
https://bitcoinblog.de/2020/12/07/blockchain-analyse-firma-chainalysis-wird-zum-einhorn/