Singapore Fund GIC Acquires Stake in Blockchain Analytics Firm Chainalysis
Chainalysis, a company that offers blockchain study and data facilities, has announced that it has obtained US$170 million in financing from investors, one of which is the sovereign wealth fund of Singapore known as GIC. This comes as the widespread adoption of cryptocurrencies has increased the rising need for diagnostic solutions that enable market supervision.
The corporation, which has its headquarters in New York with clients that include the Internal Revenue Service of the United States, is currently estimated at $8.6 billion US dollars. Notable investors in the funding round comprise Blackstone, the Bank of New York Mellon, and Accel, which is a private equity company located in Palo Alto, California. All of these investors had already participated in prior funding rounds.
Chainalysis stated “The significance of blockchain data and analysis has been recognized for some time by government agencies. The need for risk administration and business intelligence tools from financial firms exploring the cryptocurrency market hit a record high during the course of the last year.”
The purchase by GIC comes after a sell-off of cryptocurrencies, which caused bitcoin’s price to drop under US$27,000 on Thursday. This is a level that has not been recorded since the final leg of December 2020. Ether, the numero uno altcoin, is now trading at a level that is sixty percent lower than its high in November 2022.
The decline in the value of cryptocurrencies has occurred concurrently with the decline in the value of many other riskier investments, including equities and high-yield bonds. This is occurring in the context of increased concerns regarding the possibility of a worldwide recession, which may be made worse by additional rate hikes implemented by the US Federal Reserve in 2022.
The recent decline in the value of cryptocurrencies seems to disprove the arguments advanced by supporters. These supporters predicted that the $1.25 trillion crypto market would still not correspond with the profitability of traditional assets. The use of cryptocurrencies in illegal operations including money laundering and unlawful finance flows that are connected to blacklisted states is becoming more common. As a result, an increasing number of national authorities are depending on the data provided by blockchain-analytics companies, including Chainalysis and its competitor Elliptic, to assist in the suppression of unlawful transactions and the prevention of punishment dodges.
According to Elliptic, for instance, Iran accounts for 4.5% of all bitcoin mining worldwide. This is because Iran is looking for methods to get over trade restrictions and generate “hundreds of millions of dollars” in crypto assets, which can then be utilized to cover all the import expenses and get around sanctions.
A year ago, Chainalysis stated that it assisted the Office of Foreign Assets Control (OFAC) of the United States Treasury in scrutiny of Russia crypto exchange Suex. Suex got sanctioned by OFAC after it was found to be involved in the embezzling of more than $160 million using cryptos, and OFAC requested that Chainalysis assist in the investigative process.
Crunchbase’s data shows that GIC is the initial sovereign wealth fund to acquire a stake in Chainalysis. This information comes from the website that keeps tabs on venture financing. In the last few years, the sovereign wealth fund has made a number of investments in companies dealing with digital assets. These investments include the Hong Kong-listed BC Group, the holding company of the licensed digital asset trading platform OSL, and the New York-listed cryptocurrency exchange Coinbase.
According to Choo Yong Cheen, GIC’s chief investment officer for private equity, the reason for the investment was “the rising need for trustworthiness and security in the broader business.” GIC acquired a stake in Chainlysis because of this desire.
Chainalysis, which has over 700 employees across the world after hiring 450 staff in 2021, has said that it would utilize the additional money for product innovation and grow its operations throughout the world. It was said that there are 370 job opportunities that need to be filled.