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Chainalysis Absolutely Dropped The Ball On FTX

<!-- SC_OFF --><div class="md"><p>Chainalysis is supposedly the leading firm behind blockchain analysis, providing data for international law enforcement and regulat agencies as well as private security clients. Im sure we’ve all seen several articles about the adept on-chain sleuthing done by these guys in the past. The question is how did they miss such a massive case of fraud and scheming?</p> <p>Chainalysis were actually laid a handsome sum by <em>partnering</em> with FTX in 2019 to revamp their “anti-money laundering and KYC systems” (hows that for comedy). They had access to their ledger data and on-chain transactions, hell Alameda was even listed as the beneficiary address for wire transfers when transacting with FTX OTC and Alameda was LITERALLY transferring funds from their trading wallet to FTX reserves. So much research has been done by crypto twitter and amateur blockchain sleuths, and a multibillion dollar firm that monitors trillions of asset transfers couldnt?</p> <p>Heres another kicker, Chainalysis also got a good amount of investment from <strong>DCG</strong> who we know also had significant exposure to FTX. As equity holders in Chainalysis (who is now confirmed to be a creditor in FTX bankruptcy), is it possible that maybe there was incentive to conceal knowledge of potential malfeasance by FTX?</p> <p>From my understanding, Chainalysis provides a paid service to businesses/exchanges to use <em>at their discretion</em> to detect illicit activity. Its also possible that FTX only used it to detect incoming transfers and then beyond that didnt use the product internally, but at one point Chainalysis definitely had privileged access to their systems. It’s either a huge failure of due diligence by a leading crypto security firm getting involved in one of the biggest fraud cases of all time or alterior motives at play</p> </div><!-- SC_ON -->   submitted by   <a href="https://www.reddit.com/user/marsangelo"> /u/marsangelo </a> <br/> <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/z0bhg4/chainalysis_absolutely_dropped_the_ball_on_ftx/">[link]</a></span>   <span><a href="https://www.reddit.com/r/CryptoCurrency/comments/z0bhg4/chainalysis_absolutely_dropped_the_ball_on_ftx/">[comments]</a></span>