Updated
GL-C-03
Glossary · Due Diligence and compliance
Chainalysis - blockchain analytics that traces where crypto has been
Chainalysis — a leading blockchain analytics platform that traces the origin of cryptocurrency for compliance, banks and law enforcement.
01 / In 30 seconds
The short answer
- What it is
- Chainalysis — a leading blockchain analytics platform
- What it does
- Tracks the origin and path of cryptocurrency
- Who uses it
- Banks, exchanges, compliance, law enforcement
- Why
- Assess whether crypto funds are linked to crime
- How to use it
- Check the cleanness of your crypto’s origin in advance
02 / In plain words
What Chainalysis means
Chainalysis is one of the world’s leading blockchain analytics platforms. Although cryptocurrency transactions are considered anonymous, the blockchain is public, and special tools make it possible to track the movement of funds: where the cryptocurrency came from, which wallets and services it passed through, and whether it is linked to risky or illegal sources (the darknet, hacks, sanctioned addresses, fraud).
Such tools are used by banks, crypto exchanges, payment services, compliance departments and law enforcement agencies. If a person gives cryptocurrency as a source of wealth, modern compliance is highly likely to check its origin through such systems. “Clean” crypto with a transparent history passes, while funds linked to risky addresses raise questions and can become an obstacle.
For clients whose wealth is partly or wholly in cryptocurrency, this is a key point: the myth of complete crypto anonymity is long out of date. Evidencing the origin of crypto funds is as important as for ordinary money. We help assess the cleanness of your crypto history in advance and prepare documents explaining the source of funds, so that the check does not become an unexpected barrier.
A case from practice
A client gives cryptocurrency as the source of funds. When it is cashed out into an account, the bank checks its history through blockchain analytics. We assess the cleanness of the wallets in advance and prepare documents on the origin — from earnings to exchanges — so that “clean” crypto passes the check without questions.
Where blockchain analytics matters
- Evidencing the origin of crypto funds
- Due diligence for crypto wealth
- Opening accounts and cashing out crypto
- Passing exchange and bank compliance
- Assessing the risks of a crypto history
- Preparing a source of wealth in crypto
03 / What it covers
What matters about Chainalysis
What it is
- Blockchain analytics
- Tracking transactions
- A public blockchain
What it looks for
- The origin of the crypto
- Links with the darknet
- Sanctioned addresses
Who uses it
- Banks and exchanges
- Compliance
- Law enforcement
For the client
- Crypto is not anonymous
- A clean history is needed
- Evidence the origin
04 / How it works
How to prepare crypto wealth
Assess the cleanness of the crypto history
We review the wallet history before submission.
Gather documents on the origin
Purchase, income, exchange statements.
Explaining the path of the funds
A short note on the path of the funds.
Passing the check
The bank or programme checks the crypto.
A clean source
The origin is confirmed.
05 / Key facts
What you need to know
01What it is
Blockchain analytics
One of the leading platforms that traces the origin and path of cryptocurrency.
02Why it works
The blockchain is public
It shows which wallets and services the funds passed through and any link to the darknet, hacks or sanctioned addresses.
03Who uses it
Banks, exchanges, compliance
As well as payment services and law enforcement.
04For the client
Crypto will be checked
If crypto is named as a source of wealth, its origin will almost certainly be checked with such systems.
Common mistakes
Treating crypto as anonymous
Assume the wallet history is visible to the reviewer.
Not proving where the crypto came from
Gather documents on the purchase, income and path of the funds, as for ordinary money.
Ignoring wallet links to risky addresses
Check the history in advance and prepare an explanation.
Cashing out crypto without a ready source history
First the source-of-funds file, then the withdrawal to a bank.
06 / Expert advice
How to prepare in advance
If your wealth is partly in cryptocurrency, assess the cleanness of its history in advance and prepare documents on its origin: where and how it was earned, which exchanges it passed through. Avoid links with risky addresses. Evidencing a crypto source is as important as for ordinary money. Then blockchain analytics in compliance will not become an unexpected barrier.
What we do for you. We help clients with crypto wealth evidence its origin in advance the way modern compliance expects. We assess the cleanness of the wallets’ history and prepare documents on the path of the funds. Cryptocurrency has no anonymity, but with a transparent history it passes checks on a par with ordinary money.
Dmitry NagyTax consultant, international taxation and compliance (ex-Big4)
07 / Questions
Frequently asked questions
One of the leading blockchain analytics platforms: it tracks the origin and path of cryptocurrency, helping assess whether funds are linked to crime.
That myth is out of date. The blockchain is public, and special tools make it possible to track the movement of funds between wallets and services. There is no complete anonymity.
Banks, crypto exchanges, payment services, compliance departments and law enforcement agencies — when checking the origin of crypto funds.
Links between funds and risky sources: the darknet, hacks, sanctioned addresses, fraud. “Clean” crypto with a transparent history passes.
Yes, just as with ordinary money. If crypto is given as a source of wealth, compliance will most likely check its origin through blockchain analytics.
Assess the cleanness of the wallets’ history in advance and gather documents on the source of funds. We help do this so that the check does not become a barrier.
INITIAL ASSESSMENT
Tell us what outcome your family needs
We will design a solution for your case, choose the country and the right status, and take the whole process through to the result.
