Chainalysis raises $1.6 million and signs agreement with Europol

Blockchain startup Chainalysis has signed a memorandum of understanding with Europol’s European Cybercrime Centre (EC3) to collaborate on efforts to combat cybercrime.

The news coincides with the company closing a $1.6 million seed round led by Point Nine Capital, with participation from TechStars, Digital Currency Group, Fundersclub, and Converge VP.

The company’s CEO, Michael Gronager, said in a statement:

“This new collaboration is an important step in our efforts to move digital currencies out of the hands of criminals and into the hands of consumers and thriving merchants.”

Europol (Europol) is the law enforcement agency of the European Union, headquartered in The Hague, Netherlands.

Focus on encryption security

While blockchain technology is widely seen as having the potential to be a major breakthrough across many different applications and industries, Chainalysis says this positivity has been tempered by negative headlines, with applications of the digital currency technology being linked to fraud and cybercrime.

The company said the recent extortion case at Hollywood Presbyterian Medical Center, which was forced to pay hackers $17,000 to regain control of its computer systems after millions of people demanded it, was a prime example.

Chainalysis also cited a report published by Europol last year, which mentioned that cybercrime is growing rapidly and Bitcoin is on the way to digital criminals.

The company hopes to change that by tracking digital identities on a blockchain, and says its software can detect suspicious activity in real time and provide investigative tools to aid law enforcement agencies.

“This is done through a private database of metadata about Bitcoin transactions. This is where the hackers are most vulnerable,” Levin explained.

Notably, Chainalysis is one of a growing number of companies developing blockchain compliance solutions, competing with startups such as Polycoin and Coinalytics.