Documents from an undated Chainalysis presentation to Italian police show the tools the firm uses to collect information about crypto transactions and users. CoinDesk reports.
Slides from the presentation surfaced on a dark-web site.
According to the leak, Chainalysis owns the Bitcoin blockchain explorer WalletExplorer. The domain registered in 2015, the firm is not listed in the registration data and has never disclosed ownership of the service.
According to Chainalysis specialists, criminals use the site to verify transactions, wary of leaving traces on exchanges.
The firm, via the service, collects information, extracting data linked to suspicious users.
“Using this data set, we can provide law enforcement with meaningful insights linked to IP data associated with an address. We can also perform reverse lookup of any known IP address to identify bitcoin wallets,” the publication quotes from the presentation.
As an example, the tool identified the IP address of a suspect in an extortion case a few hours after he allegedly deposited funds via Huobi’s over-the-counter arm.
Chainalysis also collects user data on the Bitcoin network through its own nodes. These enable the firm to capture data on the public wallet network with simplified payment verification (SPV).
“The flip side of such a design is that when a user’s wallet connects to the network, a range of information is disclosed — the IP address, the full set of wallet addresses (used and unused) and the software version,” the presentation says.
The method helped identify those involved with Welcome to Video, one of the largest sites for child pornography, Chainalysis noted.
The presentation asserts that the company can track transactions in the privacy-focused cryptocurrency Monero.
“From cases Chainalysis has worked on in cooperation with law enforcement, we were able to provide actionable insights in about 65% of Monero-related cases,” the documents state.
Earlier, Chainalysis became one of the winners of an Internal Revenue Service competition to develop tools for tracking Monero transactions.
In July 2021, after a $100 million Series E funding round, the firm’s valuation reached $4.2 billion.