Blockchain startup Chainalysis has signed a memorandum of understanding with Europol’s European Cybercrime Centre (EC3) that will see the firms collaborating on efforts to fight online crime.
The news comes as the firm closes a $1.6m seed funding round led by Point Nine Capital, with Techstars, Digital Currency Group, Funders Club and Converge VP also investing.
Chainalysis, which is an official investigator for the creditors of collapsed bitcoin exchange Mt Gox , says the memorandum it has signed with Europol promotes collaboration and information sharing. The company suggested that the deal arose from the firm’s experiences in different cybercrime cases that enable it to give guidelines for investigators when tracing bitcoin funds.
Michael Gronager, the firm’s CEO, said in a statement:
“This new collaboration is an important next step in the endeavour to move digital currencies out of the hands of the criminals and into the hands of consumers and blooming commerce.”
Europol (European Police Office) is the law enforcement agency of the European Union and has headquarters in the Hague in the Netherlands.
Focus on crypto security
While blockchain technology is now widely seen as having major disruptive potential in many different applications and industries, Chainalysis said this enthusiasm has been tempered by negative press where digital currency applications of the technology have been connected to fraud and cybercrime.
A prime example of this, the firm said, being the recent extortion of the Hollywood Presbyterian Medical Center. After millions were demanded, the hospital was eventually forced to pay $17,000 to regain control of its computer systems from hackers.
Chainalysis also cites a Europol report published last year , that said cybercrime is quickly growing and bitcoin is becoming the go-to currency for digital criminals.
The company hopes to change that through tracking digital identities on the blockchain, and said its software is able to detect suspicious activity in real time and provide investigation tools that can assist law enforcement agencies in their work.
“This is done through a proprietary database of metadata associated to bitcoin transactions. It is at this point that the criminals are most vulnerable,” Levin explained.
Notably, Chainalysis is one of a growing number of firms working to develop blockchain compliance solutions, with competitors including startups such as Polycoin and Coinalytics.
Disclaimer: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Chainalysis.