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Chainalysis Denies Breaching the Coinbase User Data

The New York analytical company Chainalysis published an official statement in the company’s blog on March 5th. The statement explains that the company does not collect or sell personal data of users when it provides its services to cryptocurrency exchanges.

It is to be noted that Chainalysis is one of the most well-known firms which provides technologies such as KYT (Know Your Transaction) tool that allows firms, governments, and law enforcement agencies to track blockchain transactions and suspicious illegal activities.
As reported that such firms can distribute user data of their customers appeared last week at the height of the community’s reaction to Coinbase’s controversial acquisition of Neutrino (an analytical company in the blockchain area). To justify the deal Coinbase senior manager said in an interview that their previous suppliers of smart tools had allegedly sold data from Coinbase users to third parties.
Chainalysis apparently answered explaining that it does not require or store, let alone disseminate, any personal data for conducting transaction analysis:
“Exchanges that use Chainalysis KYT present their transaction data, non-personally identifiable customer data, to Chainalysis to automate the process of monitoring transactions. Any reference from the transaction back to the person or persons involved should be done outside Chainalysis, because we do not collect personal information from the exchanges. ”

The statement continues to emphasize that Chainalysis focuses on marking transactions “based on indicators of risky behavior,” such as destination addresses that are known to be illegal. The continuation of this contextualization requires only basic knowledge that the address of the wallet belongs to the client of the exchange, and not personal information. According to a blog post, the company’s tools are aimed at monitoring transaction data at the service level rather than marking individual users’ wallets.

Chainalysis further explains that based on an analysis of the counter-parties and KYT screening “risk appetite and investigation are the responsibility of the exchange.”

London-based analytical company Elliptic, which provides technology for Coinbase, also denied claims that it collects and sells customer data to third parties for financial gain. The CEO and co-founder of Elliptic James Smith stated that the firm never “violated the financial integrity of private individuals” and that such allegations represent a fundamental misunderstanding of Elliptic’s role in the industry.

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