Cybercrime has been gaining steam, especially amid the pandemic. The frequency as well as the amount of ransomware paid by victims have been soaring. According to Chainalysis data, cybercriminals extorted a little under US$370 million worth of cryptocurrencies in 2020 — an increase of 336% compared to 2019.
The U.S. and other countries have been struggling to implement measures to curb cybercrime. In October last year, the U.S. Department of the Treasury’s Office of Foreign Assets Control issued an advisory that stated making payments to attackers or facilitating ransomware payments will lead to sanctions violations.
This week, the U.S. Department of Justice launched a national cryptocurrency enforcement team to tackle cybercrime. In this spirit of fighting ransomware and digital crimes in the crypto realm, blockchain data platform Chainalysis has joined forces with Excygent, a firm that helps government agencies with cybercrime investigations, data processing and lead generation.
The acquisition of Excygent will help Chainalysis expand its offerings to government agencies and grow its Investigations and Special Programs team to support end-to-end investigations. This is Chainalysis’ first acquisition following its US$100 million Series E fundraise in June this year.
Chainalysis and Excygent already have a longstanding history of collaboration with government agencies. Aaron Bice of Excygent said, “The Excygent team has been leveraging Chainalysis technology and working alongside their team to tackle some of the most significant investigations into cryptocurrency crime in recent years.”
In 2019, Chainalysis and Excygent helped investigators analyze the cryptocurrency transactions of the largest child pornography website that ultimately led to the arrests of the criminals and the shutdown of the website. In July last year, the two companies helped nab the attackers behind the Twitter hack that compromised around 130 Twitter accounts belonging to politicians, business leaders and celebrities.
In August 2020, both companies aided an investigation that foiled three terrorism financing campaigns. Two of these campaigns utilized cryptocurrencies and authorities seized over US$1 million worth of tokens, the largest seizure of crypto assets at the time. In November last year, Chainalysis and Excygent aided the seizure of over US$1 billion in crypto assets connected to Silk Road, a darknet market. In FY2021, the U.S. Internal Revenue Service has seized close to US$1.2 billion worth of tokens as of August 2021.
“Cybercrime like ransomware is one of the biggest barriers to building trust in cryptocurrency,” said Michael Gronager, co-founder and CEO, Chainalysis. “The expertise brought by the Excygent team directly aligns with our mission to leverage the transparency of blockchains to weed out bad actors from the ecosystem and ultimately promote more financial freedom with less risk.”
Based in Washington, DC, Exigent was founded in 2018 by experts in cybercrime, digital currency tracing, open source analysis and database forensics and tool development. The firm enables companies to conduct cybercrime investigations and performs operational data analytics with existing capabilities or by providing investigative and analysis solutions.