Chainalysis goes unicorn
Cryptocurrencies,  Regulation

Chainalysis goes unicorn

The blockchain intelligence firm’s latest fundraising round valued it north of the VC magic number: $1 billion

Blockchain intelligence firm Chainalysis is now a unicorn. 

The New York-based company’s latest fundraising round has valued it at more than $1 billion—a big milestone in the venture capital world that attracts attention and further investment.

Chainalysis announced on Nov. 23 that it had closed the $100 million Series C financing round led by Addition. Accel, Benchmark, and Ribbit also increased their investments in the company. It comes just four months after a $49 million Series B round. 

Along with cryptocurrency exchanges and financial firms, Chainalysis’ bitcoin and cryptocurrency tracking tools have been used by law enforcement agencies including the FBI, IRS, and U.S. Department of Homeland Security in a number of high-profile cases, notably the closure of the largest-ever child pornography ring, “Welcome to Video.” Other cases included operations targeting bitcoin fundraising by terrorist groups Al-Qaeda and Hamas. 

“Government agencies and the private sector need the right data, tools, and insights to responsibly oversee and participate in the cryptocurrency economy,” said Michael Gronager, co-founder and CEO of Chainalysis. “We have established a network of government agencies in over 30 countries and more than 250 of the most important businesses around the world who are making it safer and easier for consumers and businesses to transact, fundamentally changing the way money works.”

Acceptance and outrage

Calling Chainalysis “the financial regulatory platform for the future of digital assets,” Addition founder Lee Fixel said the firm’s “data, technology, and network are foundational to the blockchain ecosystem.”

The firm’s release noted that Bitcoin is gaining acceptance from mainstream financial institutions and regulators in the U.S. and internationally, particularly as regulators crack down on anti-money-laundering violations in the cryptocurrency industry.

“With impressive growth to date, the opportunity for continued global expansion as the preferred partner to governments and businesses seeking compliance and investigative insights is massive,” Fixel added.

Chainalysis’ growth has had its critics. In an April 25 interview, well-known Bitcoin author and evangelist Andreas Antonopoulos savaged Chainalysis, accusing the firm of  “violating the civil rights of millions of people” as it engages “in an arms race against privacy.”

Antonopoulos added, “I think it’s fundamentally immoral to even work at a company like this,” comparing it to arms manufacturers.

Chainalysis called the criticisms “unfounded,” pointing out that it helps government agencies “investigate illicit activity such as scams and human trafficking, which take advantage of many of society’s most vulnerable people.”

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Leo Jakobson, Modern Consensus editor-in-chief, is a New York-based journalist who has traveled the world writing about incentive travel. He has also covered consumer and employee engagement, small business, the East Coast side of the Internet boom and bust, and New York City crime, nightlife, and politics. Disclosure: Jakobson has put some 401k money into Grayscale Bitcoin Trust.