US Agency OFAC Intends to Re-Subscribe to Chainalysis

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US Agency OFAC Intends to Re-Subscribe to Chainalysis

Jun 23 2021

In brief

  • OFAC subscribes again to Chainalysis for effective crypto surveillance.
  • Chainalysis is crypto transaction analysis software that monitors and ensures compliance with government laws on the use of blockchain assets.
  • Financial criminals devise means to escape government surveillance by creating anonymous transactions.

To fortify and increase its surveillance capacity on blockchain transactions, the U.S. Office of Foreign Assets Control (OFAC) applied for more Chainalysis analytics capacity.

Chainalysis is a cryptocurrency analysis software that ensures compliance with regulations, detects illicit blockchain transactions, and assess risk. This software gives a  know-your-transaction (KYT) kit and reduces risks by displaying hacked and crime-related assets. It’s a perfect software for cryptocurrency exchanges and international law enforcement agencies.

OFAC’s need for Chainalysis

Through a public statement released on May 26th, OFAC indicates that it’s preparing for a greater surveillance capacity with the best operating tool. It confirms its subscription plans for the Chainalysis “Rumker Training & Support Packages” to boost its ‘mission-critical research.’

A closer look reveals that OFAC had previously requested this blockchain surveillance software on May 4th. The public statement this week shows the agency’s subsequent request for the software.

OFAC’s Department of Treasury wants to fortify investigators in its Office of Global Targeting (OGT). By acquiring the software, it will help the U.S. government to build an alliance with foreign partners. Such an alliance will smoothen investigations into terrorist financing and money laundering. Hence, its request for Chainalysis, a reliable online blockchain analysis software.

According to OFAC’s public statement, Chainalysis will help the agency handle the cluster of transactions and map transaction flows with the necessary graphs. Also, the software will explore a user’s wallet, analyze a user’s behavior, display crypto market data and exchange rates.

A report on May 27th by Elliptic, a blockchain analysis firm, disclosed that financial criminals are working on how to outwit the government’s surveillance. The crooks devised how to create anonymous transactions through mixing services. These services will help them to combine their tokens with others in fund pools to avoid detection. Also, they switched to privacy wallets and privacy coins. They also make use of unregulated exchange that will help them evade know-your-customer (KYC) regulations.

Recall that Coinbase, a U.S. crypto exchange, revealed in March that OFAC called to review several of its transactions. This action was to screen for any possible violation of the government sanction laws. However, there was no such violation.  

Also, in February, OFAC gave BitPay a fine of half a million dollars. This was because BitPay was offering crypto services to regions that are under the sanction of the agency.