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Chainalysis Grows Revenue 100% Year Over Year - Prepares For Surge In Private Sector Business

Date 13/10/2020

Chainalysis, the blockchain analysis company, today announced the results of a rapid expansion of its business, increasing its number of customers by 65% to drive 100% growth in recurring revenue YoY in the third quarter of 2020. Increased demand for investigative blockchain technology from public sector agencies largely drove this growth, while recent positive regulatory actions across the United States and internationally have set the stage for further private sector expansion as digital assets become more widely used and regulated.

To operationalize and scale critical company functions in preparation for continued growth, the company has hired Rakib Azad as VP Finance and Betsy Bevilacqua as VP Information Security. Azad joins with experience from consumer products, retail, and software companies ranging from high-growth startups to Fortune 1000 companies, most recently at MongoDB where he helped lead a successful IPO. Bevilacqua, a veteran of the cyber-security industry, has served in information security and leadership roles at both startups and Fortune 500 companies, including eBay and Facebook.

“Chainalysis builds trust and brings legitimacy to the future of finance,” said Michael Gronager, Co-Founder and CEO, Chainalysis. “When law enforcement and regulators become comfortable with digital assets, exchanges are able to grow and financial institutions can enter the ecosystem to safely and responsibly capitalize on this growing asset class. I’m excited about the top talent we are bringing on to prepare the company for the next wave of cryptocurrency adoption.”

Chainalysis solutions were used in several recent high-profile law enforcement cases, highlighting the increasingly sophisticated money laundering techniques bad actors employ using cryptocurrency, and the ability of government agencies to trace the funds if armed with the proper tools. In July, the U.S. Department of Justice (DOJ) announced the arrest of three individuals associated with the Twitter hack just two weeks after the incident. In August, the DOJ announced the disruption of two terrorism financing campaigns that used cryptocurrency donations and unsealed a civil forfeiture complaint against the holders of cryptocurrency addresses involved in laundering cryptocurrency stolen by the North Korea-affiliated Lazarus Group.

To meet increased demand from government agencies for its investigative tools and services and further facilitate public-private partnerships, Chainalysis is also growing its team in Washington, D.C.. Among those joining are Amanda Wick as Chief of Legal Affairs, previously a Senior Policy Advisor at the U.S. Department of the Treasury’s Financial Crimes Enforcement Network and a Trial Attorney at the Department of Justice; Erin Plante as Director of Technical Solutions, previously of multiple large forensic technology consulting firms; and Don Spies as Director of Market Development, previously Deputy Director of Cybersecurity and Critical Infrastructure Protection where he led the Cyber Information Group (CIG) at the U.S. Department of the Treasury.  

Recent regulatory developments suggest regulators are preparing for continued digital asset adoption, positioning Chainalysis for growth with private sector customers. Countries across the world are rolling out digital asset regulations following last year’s guidance from the Financial Action Task Force (FATF). The European Commission published the proposed Markets in Crypto Assets (MiCA) regulation, providing a comprehensive legislative framework that will apply to all countries in the European Union. Over the past several months in the United States, the Office of the Comptroller of the Currency (OCC) clarified that national banks may provide digital asset custody services to customers and engage in certain stablecoin activities, the Wyoming Division of Banking issued its first special purpose depository institution (SPDI) charter to make Kraken the first cryptocurrency exchange regulated as a bank, and the Conference of State Bank Supervisors (CSBS) unveiled a single set of supervisory rules so that cryptocurrency firms can more easily expand across the country. 

In July, Chainalysis announced it raised an additional $13M to expand its Series B round to $49M with an investment from Ribbit Capital and Sound Ventures to meet demand from the public sector. Last month, the company announced the opening of two new offices in Tokyo and Singapore to better support local cryptocurrency businesses, government agencies, and financial institutions in APAC.