As governments worldwide intensify scrutiny of cryptocurrencies, blockchain surveillance startups have rapidly expanded their operations to meet the demands of regulators and law enforcement. Two major players, Chainalysis and Ciphertrace, recently announced significant upgrades to their monitoring capabilities, collectively covering over 80% of global crypto trading volume.
Chainalysis Now Tracks 21 Popular ERC20 Tokens
On October 3, Chainalysis revealed that its platform now supports 21 ERC20 tokens, including Maker (MKR), Dai (DAI), and Basic Attention Token (BAT). Co-founder Jonathan Levin noted that regulators and investigators have shown growing interest in ERC20 tokens due to their increasing use in illicit activities. For instance, in September 2017, the decentralized exchange Etherdelta suffered a malicious code injection attack, resulting in the theft of users' ERC20 tokens. Two years later, the Cryptopia exchange lost over $16 million worth of ETH and ERC20 assets to hackers.
Chainalysis stated that it built ERC20 support in just weeks to address customer demand. The company currently serves over 130 clients across 35 countries. By the end of the year, it plans to monitor a total of 39 ERC20 tokens and nine other cryptocurrencies, covering 90% of the market by trading volume. The new capability is integrated into Chainalysis Reactor, an investigation tool already used by law enforcement to probe cross-chain hacks and other illicit activities.
Ciphertrace Combs 700 Blockchains, Accounting for 87% of Global Trade Volume
Ciphertrace has expanded its surveillance to cover 700 cryptocurrencies, including LTC, USDT, BCH, ETH, BTC, and various ERC20 tokens. The company claims its platform offers the most comprehensive intelligence in the industry, providing visibility into 87% of global trading volume with hundreds of millions of attribution data points.
In its announcement, Ciphertrace highlighted that its platform maintains the industry's most accurate pool of attribution data, including 522 million data points—such as account type, account holders, contract types, contract owners, and other metadata—tied to cryptocurrency addresses. The company leverages advanced APIs, interactive visualization, graph databases, and pattern recognition to deanonymize transactions.
Government agencies such as the IRS, DEA, ICE, and FBI in the United States have long relied on firms like Chainalysis, Elliptic, and Ciphertrace to detect illicit behavior. The surveillance model has become highly profitable as it provides critical tools for combating crypto crime and ensuring regulatory compliance.