Chainalysis Clarifies Its User Data Policy Amidst Ongoing Coinbase Allegations
Coinbase’s recent acquisition of blockchain intelligence firm Neutrino has resulted into a lot of backlash from the crypto community. The backlash was due to Neutrino’s past association with a intelligence firm called Hacking Team which has a shady track record of sharing user-data to outside resources.
However, Coinbase said that it was aware of Neutrino’s past associations, however, it was important for them “to migrate away from our current providers,” as they were “selling client data to outside sources”.
Amidst all the ongoing speculations, New York-based blockchain analytics firm Chainalysis clarified that its doesn’t collect or sell user data while providing services to cryptocurrency exchanges. Chainalysis is one of the most well-known firms in blockchain intelligence industry.
The company provides proprietary tools like KYT (Know Your Transaction) which allow governments, law enforcement agencies, and other companies to monitor blockchain transactions and track other illicit activities like terror financing and money laundering.
Chainalysis clearly states that it doesn’t circulate any personal data to conduct such transaction analysis. It notes: “Exchanges that use Chainalysis KYT [...] submit their transaction data — not personally identifiable customer data — to Chainalysis to automate the process of transaction monitoring. [...] Any link from a transaction back to the person or people involved [...] must be made outside of Chainalysis because we do not collect any personally identifiable information from exchanges.”
Chainalysis further notes that it focuses only of flagging those transactions having indications of illicit behaviours. This can include destination addresses known to be illicit entities. Thus its analysis requires basic knowledge about a given wallet address belonging to a customer of a particular exchange, and not other personally identifiable information.
Thus, the analytics tolls provided by this blockchain intelligence firm are aimed at monitoring only the service-level transaction data and not labelling the individual users’ wallets. Furthermore, Chainalysis notes that based on its KYT screening and counterparts analysis the “risk appetite and investigations are the exchange’s own responsibility.”