Private firms continue to fill in the gaps for digital investigators.
The blockchain can be pretty overwhelming, with criminals moving their funds through a string of addresses before finally cashing them out. Presumably to deal with that issue, several US law enforcement agencies, including the Federal Bureau of Investigation (FBI), the Drug Enforcement Administration (DEA), and Immigration and Customs Enforcement (ICE) have all paid for software from bitcoin tracking company Chainalysis according to public records, with one purchase order being signed just this month.
“Chainalysis protects the junction between finance and the decentralized internet,” the company’s website reads. In short, Chainalysis’ platform allows a user a bird’s-eye view of the blockchain, including transactions between specific bitcoin exchanges, such as Bitstamp, and other entities, including dark web marketplaces.
“We serve everyone who has an interest in managing risk and compliance in digital currencies,” Chainalysis co-founder Jonathan Levin told Motherboard in an email. That includes everyone from large financial institutions, to small bitcoin businesses, to law enforcement customers, according to Levin.
“However we do not make them or our revenues public,” Levin added.
Since August 2015, the FBI has spent over $330,000 on Chainalysis products, according to procurement records. The most recent payment of around $150,000 took place this February. In a 2015 video, Levin claimed Chainalysis cracked several cybercrime cases, including high profile ones concerning the Silk Road.
“This subscription via Chainalysis allows users to navigate the public Bitcoin transaction hedger, tracing transactions across addresses, the Bitcoin equivalent of account numbers,” a note included with one of the FBI’s procurement records reads. Judging by another record, the technology is used by the FBI’s Criminal Investigative Division, and a third says the FBI has “successfully utilized” Chainalysis’ tool.
This month ICE paid Chainalysis just over $13,000, bringing the agency’s total expenditure to over $58,000. The Internal Revenue Service (IRS), which has been involved in a number of dark web investigations, has spent over $88,000 on the tech, and the DEA bought a one year subscription last September.
It’s not only US law enforcement that have a relationship with Chainalysis. In February, the company signed a Memorandum of Understanding (MOU) with Europol, Europe’s law enforcement agency, to facilitate information sharing.