Blockchain surveillance companies are rapidly scaling their monitoring capabilities to meet growing demand from governments and law enforcement agencies. Two of the most prominent firms, Chainalysis and Ciphertrace, have recently announced significant expansions that together allow them to track approximately 87% of global cryptocurrency trading volume.
Chainalysis Adds ERC20 Token Tracking
On October 3, Chainalysis revealed it had added support for 21 prominent ERC20 tokens, including Maker (MKR), Dai (DAI), and Basic Attention Token (BAT). Co-founder Jonathan Levin explained that regulators and investigators have shown increasing interest in these tokens due to their involvement in fraudulent activities. Notable incidents include the 2017 Etherdelta hack, where a malicious code injection drained ERC20 tokens from user wallets, and the 2019 Cryptopia exchange theft, which saw over $16 million in ETH and ERC20 tokens stolen.
The company stated it built ERC20 capabilities within “a matter of weeks” and now serves more than 130 clients across 35 countries. By the end of 2019, Chainalysis plans to track a total of 39 ERC20 tokens plus nine other cryptocurrencies, covering 90% of market trading volume. The new functionality is also integrated into Chainalysis Reactor, the firm's investigation product used by law enforcement to trace cross-chain illicit activity.
Ciphertrace: 700 Cryptocurrencies Under Surveillance
Ciphertrace has taken an even broader approach, announcing it now monitors 700 different cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), Bitcoin Cash (BCH), Tether (USDT), and various ERC20 tokens. The company claims this represents one of the most comprehensive cryptocurrency intelligence systems available, providing “visibility into 87% of global trading volume.” Ciphertrace's platform maintains over 522 million attribution data points, encompassing account types, account holders, contract types, contract owners, and other metadata associated with cryptocurrency addresses.
To achieve de-anonymization, Ciphertrace employs advanced APIs, interactive visualization tools, graph databases, and pattern recognition algorithms. This infrastructure allows financial institutions and government agencies to identify money laundering, terrorist financing, and other illicit activities that were previously difficult to trace across multiple blockchains.
Government Agencies Rely on Blockchain Forensics
In the United States, agencies such as the IRS, DEA, ICE, and FBI have long contracted blockchain surveillance firms like Chainalysis, Elliptic, and Ciphertrace. These companies argue that their software possesses powerful de-anonymization capabilities, making it increasingly difficult for criminals to use cryptocurrencies anonymously. As the crypto ecosystem expands, blockchain forensics has become a highly profitable business model, with surveillance firms continuously adding new tokens and chains to their databases to meet regulatory demands. The latest expansions by Chainalysis and Ciphertrace underscore a broader trend: blockchain transparency is no longer optional — it is becoming an integral part of the global financial infrastructure.