20 Blockchain surveillance companies monitor crypto networks, but some apps show inaccuracies

In recent years, blockchain surveillance has increased tremendously, and in the early days around 2013-14, there were only a handful of companies. There are now more than 20 blockchain analytics companies that monitor addresses, transactions and make sure addresses are AML / CFT compliant too.

The Rise of Blockchain Analysis Ventures

In the early days before 2013-14, bitcoiners and cryptocurrency users hadn’t really heard of blockchain surveillance. Nowadays, there is a large number of companies offering services such as analysis, monitoring and identification of the vulnerabilities of the blockchain code base. Several companies have worked with law enforcement in the United States and also have contracts with groups like Europol. At the time of publication, there are more than 20 different blockchain intelligence businesses working within the cryptocurrency ecosystem. Some of them are well known companies such as Cyphertrace, Chainalysis and Elliptic. Other platforms are offered by Alethio, Bison Trails, Blockpit, Blockmonitor, Bloxy, Postchain, Scoreshain, Sixgill, Tibco, Credits, Crystal Blockchain, Dune analytics, Madana, Bitrank and Ocyan are lesser known operations.

Some of these startups have dedicated their business models to blockchain surveillance and monitoring a large number of different networks. In October 2019, Chainalysis explained that it was monitoring 21 different tokens that derive from Ethereum. In the same month, the Ciphertrace company revealed that it is monitoring 700 cryptocurrencies providing “visibility on 87% of global trading volume”. Many of these companies publish research reports on the data they uncover during investigations of hacker exchanges and other types of crypto scams. Elliptic Made Famous A slew of blockchain surveillance firms released data after last year’s massive Plus Token scam.

How accurate are these distributed ledger monitoring platforms?

But skeptics often wonder how good these tracking apps are and how they handle coins that have been shuffled using the coinjoin process. News.Bitcoin.com recently discovered a platform called Bitrank, a project that allows people to simply copy and paste a BTC or ETH address, in order to check if the address follows AML / CFT compliance. Bitrank’s website claims it’s simple to use and “easy to understand” if people are interested in “Bitcoin address reports for AML / CFT compliance”. The company also says that if you run a crypto business you should take advantage of the platform’s risk score. However, news.Bitcoin.com tested Bitrank’s platform and found some discrepancies.

For example, on May 15th our editorial team pasted a well-known legacy BTC address that is allegedly related to the Plus Token scam. On February 11, Plus Token’s Ponzi scammers moved 12,000 BTC from one wallet to another. The address and some of the other addresses are also marked by a variety of blockchain explorers. That address using the Bitrank application gave it a risk score of 52 or “acceptable”. Other addresses linked to the same address also scored the same and it was deemed “acceptable”, according to the Bitrank service. After our editorial team found another discrepancy, we then pasted in an address used by a well-known mining pool. 1KFHE7w8B … had seen a total of 4,968,400 BTC deposited in the address to date. This particular address has been marked by Bitrank as “high risk” with a risk score of 18.

As digital assets become popular, platforms that monitor crypto transactions are likely to increase

It is probably considered risky because the address has seen nearly 5 million BTC since it was created. According to Bitrank, he explains that the addresses that the risk assessment shows is involved in an exchange, input over 10K, exchange client, darknet deposit, Binance client withdrawal, Bittrex client withdrawal, seen on Paste Bin, seen on a darknet forum and seen on a darknet listing. The address associated with the 12,000 BTC used by the Plus Token scammers does not show risk assessment data from Bitrank. The creators of the platform may be aware of the discrepancies, and the website says the scoring results will soon be improved.

“In the coming weeks, Blockchain Intelligence Group will implement some significant improvements to Bitrank with a series of refinements to the Bitcoin and Ethereum scoring results,” the website explains.

With more than 20 blockchain analytics firms monitoring blockchains and even reporting to law enforcement, it shows the practice is popular. However, if some companies regularly use blockchain analytics tools, they may find erratic reports and inaccurate information. Many of these services offer APIs and platforms for paid customers, and affected customers may want to search these platforms for any known issues. Blockchain surveillance has become very lucrative for a number of these companies, as governments around the world have hired these companies for investigations and intelligence reports. It is likely that as the crypto economy continues to see unstoppable growth, these distributed ledger investigators will continue to rise.

What do you think about the fact that there are over 20 blockchain surveillance companies in 2020? Let us know your thoughts in the comments below.

Image credits: Shutterstock, Pixabay, Wiki Commons, Bitrank, Chainalysis, Elliptic,