Chainalysis is the latest firm to speak up about their usage of user data in a March 5, 2019 blog post, following similar response from Elliptical in the wake of Coinbase controversy.
It All Started with an Interview
On March 1, 2019, Christine Sandler, Coinbase’s Head of sales, sat down with Cheddar for an interview during which she explained the firm’s much-maligned decision to acquire analytics firm Neutrino, despite the controversy surrounding their co-founders.
It was a simple answer; Neutrino’s technology was cutting edge and their previous analytics provider had been selling user data. This answer, though simple, caused a ripple effect on the industry and a few days later, Elliptic, a technology provider for Coinbase, released a public statement making it clear that they have never indulged in the selling of user data.
Along with a published FAQ section that addressed the ways by which Elliptic handles user data. the post writes:
“I have been disappointed to see reporting in the past few days which has incorrectly implied that Elliptic is distributing personal information for financial gain. Such comments fundamentally misunderstand the data we analyse, the insight we share with our clients, and the role we play in the industry,”
Now, Chainalysis is the latest firm to speak out about the matter and published a blog post which states that they do not collect or sell user data when rendering services to cryptocurrency exchanges.
The post explains that whilst the blockchain creates a record of the various transactions that take place between addresses and exchanges, it is also the case that Chainalysis is responsible for processing such data and showing the real-world entities that are attached to them, in order to know where the funds originate from and where they are going to.
They went on to state that exchanges which make use of their technology, submit transaction data to them for analysis but do not submit individual user data. The post explains that Chainalysis is aware of which addresses belong to which customer of a given exchange, but do not know who the customer themselves are.
While Chainalysis might flag transactions based on some risky behavior such as interaction with accounts known for criminal activity, they work with service-level information, not individual information and thus, there is no user information in their possession that could be sold.