Chainalysis Proposes Standards for Tracing Blockchain Transactions

Blockchain analytics firm Chainalysis is proposing new standards for tracing funds on a blockchain.

Chainalysis on Monday (June 29) introduced an ontology that explores how investigators can track funds to wallet clusters to help law enforcement in their investigations into illicit finance.

“Investigators and compliance teams rely on blockchain data to follow and seize illicit assets and make decisions about the customers they allow on their platforms,” Chainalysis said. “Yet the foundational concept behind blockchain analytics — the ‘cluster’ — has never been formally defined and is actually comprised of three distinct analytical operations, each with different evidence standards, error characteristics, and consequences when wrong. The stakes are too high for ambiguity around this term to continue.”

In its paper, Chainalysis puts forth a “formal ontology” it uses to deconstruct the cluster, giving each part a name, definition and evidentiary standard. The company also presents a two-tier evidence framework dividing structural claims from “intelligence-driven attribution,” along with a proposed shared vocabulary the industry “can use to hold itself accountable.”

Jacob Illum, Chainalysis’ chief scientist, said in an interview with CoinDesk that the ontology is designed to develop standards for blockchain analytics to reassure investigators or prosecutors about the usefulness of the data they might take to court.

“If I was the one who needed this information to actually either convict on or prosecute or investigate, what would I want a tool to do?” Illum asked. “… what’s supported by the data? That’s my job, to tell an investigator as much as possible what you can do with what the data tells us.”

Chainalysis earlier this year announced it was launching blockchain intelligence agents designed for fraud prevention. As PYMNTS wrote at the time, this demonstrates that the industry’s response to artificial intelligence-driven crypto fraud and bot attacks is one that must ultimately be symmetrical.

“Agentic blockchain defenses are not innovation for efficiency’s sake. They are defensive escalations,” that Chainalysis report said. “If bad actors can use artificial intelligence to accelerate activity, enforcement and compliance must use AI to compress detection and response times, meaning tasks that once took days should now take minutes, and investigations that required specialists must be executable by broader teams.”

The Chainalysis agents, according to the company’s announcement, are not simply incremental upgrades to analytics tools already in use. “They could represent a structural shift in how organizations interact with blockchain intelligence, making the process less like querying a database and more like collaborating with a specialized analyst that never sleeps,” the report added.