Cryptocurrency investigation platform Chainalysis completed a Series E round of funding led by global investment management firm Coatue. The company raised $100 million at a $4.2 billion valuation.
In 2019, MUFG invested as part of a $36 million Chainalysis Series B round. The company completed a Series D round of funding this March, and a Series C in November of last year, both for $100 million, bringing the total investment to $365 million. Previous investors Benchmark, Accel, Addition, Dragoneer, Durable Capital Partners, and 9Yards Capital participated in this round. New investors include Altimeter, Blackstone, GIC, Pictet, Sequoia Heritage, and SVB Capital.
Despite all the transparency and traceability associated with blockchain, cryptocurrency has been used as a tool for money laundering as well as ransomware. Research conducted by the Elliptic found that less than 1% of Bitcoin activity is illicit. However, as the industry grows and becomes more mainstream, that 1% becomes more significant. The demand for crypto compliance solutions is increasing amongst financial institutions and government agencies.
Chainalysis is a leading provider of investigations and compliance software for the cryptocurrency industry. The company works for governments and the private sector to detect unlawful activity. Globally, Chainalysis works, among others, with the UN Office on Drugs and Crime and EUROPOL. In the U.S. their service is more influential. According to Bitcoin.com, the company has contracts with Homeland Security, FBI, IRS, ATF, DEA, SEC, Secret Services, CIA, NYPS, and other large police departments.
The investment will mainly be used to expand the data to more cryptocurrencies, to launch a Global Intelligence function that identifies potential threats more efficiently, develop software for data collaboration between the public and private sectors, and facilitate access to Chainalysis data through APIs.
“The future of finance and national security will be based on blockchain data-driven decisions,” said Michael Gronager, Co-founder and CEO, Chainalysis. “We’ve harnessed the transparency of blockchains to provide actionable insights into markets, threats, and business opportunities. Our partners at Coatue understand the power of our vision for the Chainalysis data platform and the software, access, and services it powers.”
Meanwhile, Santander completed a pilot with cryptocurrency risk and compliance firm Elliptic. Blockchain forensics firm TRM Labs raised $14 million in funding with participation from PayPal and Salesforce. And Ciphertrace has so far secured $27.1 million for its Series B, according to an SEC filing.