Chainalysis Raises Another $100 Million Amid a Blockchain Boom

Chainalysis Inc., a blockchain research, risk-management and analysis firm, raised $100 million from investors led by Paradigm, co-founded by Coinbase‘s Fred Ehrsam.

The new investment values Chainalysis at more than $2 billion and comes just months after a previous $100 million investment in November, according to a statement Friday. Other backers include Addition, Ribbit and Time Ventures, the investment fund of billionaire Marc Benioff, Chainalysis said.

New York-based Chainalysis helps government agencies and private firms process and understand transactions recorded on blockchains such as Bitcoin and Ethereum to root out “cryptocurrency crime and money laundering,” according to the statement. The traditional financial world is coming around to cryptocurrencies and blockchain projects more than a decade after the creation of Bitcoin in 2009.

Interest usually starts in private-bank units where wealthy customers want to buy crypto, which spurs the need to store the digital assets and maintain compliance services, Chainalysis Chief Executive Officer Michael Gronager said in an interview. It’s also difficult for financial firms to know how to mine blockchain data for analysis, he said.

“All of that is where they need us,” Gronager said.

Chainalysis, which has no immediate plans to go public, is choosing growth over profitability for the time being, Gronager said.

“We’re assuming we can do even better in 2022,” he said. “We can do more, but doing more takes money.”

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