Underlining the importance of compliance, Chainalysis, a blockchain tracking firm has raised $100 million in a Series D round that includes participation by leading venture capital companies.
In six years, the New York firm has raised $266 million.
The round was led by Paradigm, with participation by Addition Capital, Ribbit, and Time Ventures. And it comes after the $100 million Series C in November at a $1 billion valuation. This latest round values the firm at $2 billion.
And for good reason too, as Chainalysis counts government investigators, crypto exchanges, and even financial institutions among its client base.
Chainalysis is among the largest US cryptocurrency investigation firms building software to untangle messy blockchain transaction histories. Crypto transfer records may be publicly available, but are difficult for the layperson to decipher without context.
Case in point, flagged wallet addresses and blacklisted coins.
This is where Chainalysis comes in and it has turned this into a multimillion-dollar business opportunity.
Government agencies use its products to bust Bitcoin linked crime rings, while exchanges turn to it for help in vetting and sometimes freezing stolen crypto. US agencies like the FBI, IRS, DHS, and other federal offices spent over $10 million with the company in 2020.
The company says that onboarding new clients is an expensive proposition, and the money raised will go towards building that out.
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