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Hello everyone! This is Pavluu. More recently, we have written about some very important topics that are relevant to darknet users and Bitcoin users. These were the following translations of articles:
1) 47% of all Bitcoin transactions are carried out within the darknet
2) Application of Bitcoin transaction analysis to de-anonymize users of Tor hidden services
Today, continuing the topic of the extremely dubious anonymity of bitcoin, I present to you another translation of an article on how US government agencies order the analysis of blockchain transactions for various purposes: from tax requirements on income from cryptocurrency to calculating the darknet of drug dealers.
The article itself:
To date, the US federal government is known to have paid approximately $ 700,000 to a private corporation to enable various agencies to monitor the bitcoin blockchain.
What is this private corporation?
The corporation that helps the United States government conduct mass surveillance of bitcoin transactions is called Chainalysis. Here is their website. What is known about this company?
- Chainalysis has agreements with at least 6 US federal agencies.
- Chainalysis has offices in New York in the United States and Copenhagen, Denmark.
- This is a blockchain surveillance company contracted by various agencies of the US federal government. It was founded in 2014.
- Chainalysis isn't the only corporation to help law enforcement control bitcoin transactions. DeepDotWeb previously reported on a private corporation known as Verint that offers services to local and state police departments, such as when they offered virtual currency (BTC) monitoring services to the Boston Police Department early last year.
Which US government agencies have used Chainalysis?
- Internal Revenue Service
- Drug Enforcement Administration (DEA)
- Federal Bureau of Investigation (FBI)
- US Immigration and Customs Enforcement
- Department of finance
- Tax
- Department of Securities and Exchange
How much did they pay for these services?
Also, it is worth noting that the Immigration and Customs Police and the Internal Revenue Service (SVD) have a separate agreement with Flashpoint, which helps them analyze blockchain transactions and calculate the darknet of users. SVD was involved in several darknet investigations and paid Flashpoint to access their API.
Of course, many use cases for Chainalysis and Flashpoint remain unknown. However, there is an extremely interesting fact: the services of these companies were resorted to in the closure of the Silk Road. We are talking about ex-DEA employee Karl (read the book "Cybercriminal # 1, she is in the channel!) And his stealing bitcoins during the investigation of the Silk Road site. It was Chainalysis that helped to reveal his little trick.
It should be noted that Chainalysis does not only work with law enforcement agencies in the United States, the company also works around the world . In February 2017, Chainalysis signed a "Memorandum of Understanding on the Exchange of Information" with the EU law enforcement cooperation agency, also known as Europol.
Michael Grenager (CEO and co-founder of Chainalysis) told Danish TV the following:
Michael believes Bitcoin provides financial transparency in response to the financial crisis. Other corporations are looking to provide blockchain surveillance software and services for law enforcement agencies such as Elliptic.
Elliptic is an American-British company founded in 2013 and has received millions of dollars in funding from Octopus Investments, Santander InnoVentures, KRW Schindler, Digital Currency Group and Paladin Capital Group.
Paladin Capital Group is chaired by a former director of the NSA. In late 2016, the company partnered with LexisNexis Risk Solutions to combat money laundering. People looking to avoid financial oversight should consider using confidential cryptocurrencies with opaque blockchains like Monero.
