Chainalysis hits back at Andreas Antonopoulos
Bitcoin,  Regulation,  Technology

Chainalysis hits back after Andreas Antonopoulos says company is ‘fundamentally immoral’

The blockchain intelligence firm’s comments came after the highly regarded Bitcoin evangelist accused the company of helping dictators violate civil rights

Blockchain intelligence firm Chainalysis hit back at Andreas Antonopoulos after the Bitcoin author and evangelist launched a scathing attack, accusing the crypto intelligence firm of “violating the civil rights of millions of people.”

Chainalysis hits back at Andreas Antonopoulos
Chainalysis CEO Michael Gronager (Photo: Chainalysis).

In an April 25 interview with The Crypto Lark, Antonopoulos on April 25 claimed Chainalysis and its rivals “are basically in an arms race against privacy.”

He also accused the company of offering assistance to “the world’s worst dictators and regimes either directly or indirectly.”

Antonopoulos’s tirade was in response to a question about whether Bitcoin’s lack of privacy could be an issue in the future, with Chainalysis helping governments and law enforcement agencies to monitor transactions on blockchains.

“I think it’s fundamentally immoral to even work at a company like this,” he said. “Just like I would consider it immoral to work for a weapons manufacturer or a company that builds cages for refugee concentration camps.”

The crypto educator also predicted that Chainalysis would “eventually lose.”

Chainalysis hits back

A spokeswoman for Chainalysis told Modern Consensus via email that it can’t spend time “fully unpacking these unfounded claims.”

In a statement, the company said it has policies and procedures in place to help it determine which governments to work with, adding: “As a general rule, Chainalysis does not work with dictatorial governments.”

The firm also said that its goal was to help Bitcoin fulfill its potential and achieve mainstream adoption.

While Antonopoulos maintained that Chainalysis violates the civil rights of millions, the company said it helps government agencies “investigate illicit activity such as scams and human trafficking, which take advantage of many of society’s most vulnerable people.”

Elliptic co-founder swipes 

In comments emailed to Modern Consensus, Dr James Smith, the co-founder of Elliptic, a rival of Chainalysis, was asked whether his business was focused on securing government contracts.

He said that Elliptic’s main goal was to help businesses fight financial crime, and helping regulators “design and implement effective crypto regulations.”

In what could be interpreted as a swipe against Chainalysis, Smith added: “Unlike our competitors, however, we do not treat regulators or law enforcement agencies as a business line, and do not depend on revenue from them.”

Chainalysis is a privately held company—and although it is profitable, it’s unclear how reliant the business is on contracts with governments.

A necessary invasion?

As much as there may be moral concerns over the services that Chainalysis offer, and questions over whether the business models of such companies can be overly reliant on privacy-defeating government agencies, the insights they offer have helped to reduce suffering—and potentially help the crypto sector comply with financial regulations and gain some much-needed credibility in the eyes of the public.

In October 2019, this type of  tool helped federal prosecutors back-trace Bitcoin transactions to break up Welcome To Video—a major child pornography ring that hosted the largest volume of illicit content ever discovered.

The company’s crypto analytics have also shed a light on other child abuse material sites, with recent figures suggesting that the value of virtual currencies sent to exploitation platforms is continuing to grow—data it described as a “concerning trend.”

Beyond that, Chainalysis has helped businesses and crucial organizations such as hospitals get wise to the threat of ransomware, where hackers take over computers used to provide critical services and demand payments in Bitcoin to get them unlocked. A recent report warned that fraudsters were still prepared to attack medical facilities despite COVID-19, making these tools more important than ever.

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Connor Sephton is a journalist with an interest in cryptocurrencies, personal finance, and financial inclusion—as well as the challenges the crypto industry faces in achieving mainstream adoption. He owns cryptocurrencies.