The Big Whale: You're the new CEO of Chainalysis, but we don't know much about you... What were your past activities before Chainalysis?
Jonathan Levin: I discovered crypto in 2012 at a time when only computer scientists were researching Bitcoin, which was then the leading cryptocurrency. Litecoin and Feathercoin and other digital assets already existed, but no economists were really studying how Bitcoin worked. Bitcoin is a computer innovation, but it is also an economic system based on game theory. So I wrote academic studies on the mechanisms for securing Bitcoin using game theory. Then I realised that we needed a company that could understand in depth how and why people use cryptocurrencies, if we wanted this industry to grow. So I co-founded Chainalysis with Michael (Gronager) and Jan (Møller), to create a company with the most advanced expertise on the use of cryptocurrencies and the dynamics of blockchain transactions.
What makes Chainalysis the leader in its sector?
Chainalysis is first and foremost a data company that provides information and context on blockchain transactions, identifying which services are behind which transactions. We have built up unique expertise on these services around the world, and have been doing this for over a decade. We are the best at producing reliable and accurate data sets, and our main objective now is to deliver this information flexibly to our customers so that they can solve problems related to investigations, regulatory compliance, market intelligence and taxation. We've always been able to deploy these insights in the most efficient way possible, and that's what sets us apart.
All right, but lots of other players are doing the same thing. What really sets you apart?
Everyone can consult the blockchain's public register and see the transactions. But what nobody has is information about the services that generate these transactions and write them to the blockchain. We're the best at mapping this information, and we have a key advantage: more than 1,000 private sector customers send us their transactions, which gives us unique insights that we give back to them to ensure regulatory compliance. No other player in blockchain analytics processes this volume of transactions, and it's this wealth of data that enables us to offer the most powerful solution on the market.
"We recently acquired two strategic companies" What are your strategic priorities in the coming months?
We're already the market leader in compliance and investigation, but that's not enough to ensure that the next phase of cryptocurrency adoption is safe and secure. We need to be able to anticipate and prevent the loss of funds, not just analyse transactions after the fact. That's why we recently acquired two strategic companies: Hexagate, which specialises in analysing smart contract vulnerabilities and preventing the loss of funds in DeFi, and Alterya, which fights fraud and scams. We have observed that a considerable amount of money is lost every year to scams, and Altaria is now helping banks, fintechs and crypto companies to identify and map fraudulent accounts in order to protect their customers from these threats.
How do you perceive the situation in the United States with Donald Trump's return to power? Is this a good thing for the industry?
The industry will benefit from the dismantling of certain regulations in the United States. For example, the SAB 121 accounting rule, which prevented major financial institutions from holding cryptos for their clients, was cancelled three days after Trump took office. This opens the door for traditional financial services to enter the market. This is not just a change in tone, but concrete progress towards removing the regulatory barriers that have held back the industry. We will certainly see more of these developments, causing companies to rethink their strategy for entering the US market.
Do you have any advice for the crypto industry in Europe in the face of this new situation in the US?
The European companies that will benefit the most will be those that establish strategic partnerships with players that have a presence in the US. Whether it's payment services enabling US consumers to buy European products, or money transfers between the two regions, there are significant opportunities. What's more, the appetite of American investors to back companies in the sector is set to grow. European entrepreneurs who can demonstrate the usefulness of their technology in the United States will find it easier to raise funds.
With MiCA coming into force in Europe, what changes do you anticipate for your customers in this region?
MiCA brings clear rules for the industry. European countries, such as France, are still issuing licences to companies to bring them into compliance. Full implementation will take time, as governments have to integrate and apply these regulations. But we are seeing concrete progress: France, Austria, Luxembourg and Liechtenstein are already granting licences, making the environment more structured and favourable for crypto businesses in Europe.
>> Read also: Diederik van Wersch (Chainalysis): "Adoption is not measured only with the price of bitcoin"
What is your opinion on privacy coins?
All privacy-enhancing technologies have an important role to play. Innovations such as zero-knowledge proofs have relevant use cases, particularly in terms of digital identity. However, we are seeing relatively low adoption of privacy corners. The vast majority of users use exchange platforms where confidentiality is managed within a framework that complies with regulations. We continue to monitor the evolution of these technologies, but we note that "open" blockchains remain the ones that concentrate the most volume and adoption.
"Lazarus Group remains extremely active and continues to be one of the main players in cybercrime" What is the current state of crypto crime in the world? Can you share any recent data?
In absolute terms, cryptocurrency crime remains a significant problem, accounting for more than $40 billion in illicit transactions. However, it is essential to put these figures into perspective with the massive growth of the crypto ecosystem. In proportion, criminal activity remains a relatively small part of the total volume of transactions on the blockchain. Nevertheless, we are seeing some worrying trends, including an increase in cryptocurrency theft, with a shift from purely DeFi hacks to attacks that also target centralised exchanges. We are also seeing a persistence of ransomware, which continues to pose a major problem for many critical infrastructures around the world.
You have published numerous analyses on the Lazarus Group, a group of hackers linked to the North Korean government. What can you tell us about this group's current activities?
The Lazarus Group remains extremely active and continues to be one of the main players in cybercrime in the crypto ecosystem. Last year, we observed that this North Korean-affiliated group managed to steal around $1.4 billion in cryptocurrencies, which is a colossal sum compared to the country's economy. Their tactics are constantly evolving: they no longer just hack DeFi protocols, but also target centralised platforms, conducting sophisticated social engineering campaigns and sometimes infiltrating crypto companies by secretly recruiting employees. In addition, we have seen increasingly elaborate attempts at money laundering, using blending services and complex networks to evade regulators' controls. At Chainalysis, we have stepped up our efforts to monitor these flows and help businesses and governments detect and stop these threats before they cause more damage. It's a long-term battle, but cooperation between industry players and the authorities helps to improve prevention and response to these cyber attacks.
In Europe, some criticise Chainalysis' proximity to US intelligence agencies. What can you say to that?
Chainalysis is first and foremost a private and independent company, whose main mission is to bring transparency to the crypto ecosystem. We work with more than 1,500 clients around the world, including governments, financial institutions, crypto companies and regulatory agencies, in many countries, not just the US. Our role is not to serve the interests of any particular state, but to provide tools to ensure industry security and compliance. We work with public and private entities in Europe, Asia and Latin America, and we have a global presence that allows us to adapt our services to local needs and regulations. What matters to us is ensuring a safer environment for all blockchain users, fighting financial crime, helping businesses comply with regulations and facilitating the responsible adoption of cryptocurrencies.
How can blockchain analytics be applied to sectors beyond finance? Could Chainalysis be interested in other areas such as supply chain or healthcare?
Today, we are very focused on financial services, because the opportunities there are immense. There is still a lot to be done to ensure compliance and strengthen the security of the crypto sector. We are seeing discussions emerging in other areas, such as the possibility of using blockchain to improve government efficiency (an idea inspired by Elon Musk, editor's note). But for now, we remain focused on our core mission: improving the security and transparency of the financial sector.
Are you planning to go public this year?
I took up my position as CEO just 60 days ago, and my top priority is to build a solid company and grow our business. Today, we are in a phase where the industry is evolving rapidly and we have huge opportunities to expand our products and market share. We are fully focused on innovation and expanding our services. IPO is something that may be considered in the future, but for now my focus is first and foremost on growing Chainalysis and maximising our impact in the industry.
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