GIC invests in blockchain-forensics firm Chainalysis, raising valuation to US$8.6 billion as governments gear up to fight illegal activity
- The New York-based company gets US$170 million in a round of funding led by the sovereign wealth fund
- The deal comes amid a broad sell-off in the US$1.3 trillion cryptocurrency market, as bitcoin drops to a 17-month low
Chainalysis, which provides blockchain analysis and data services, said it has secured US$170 million in funding from investors including Singapore sovereign wealth fund GIC, as wider cryptocurrency adoption fuels demand for forensic tools that enable market surveillance.
The New York-based company, which counts some of the world’s tax authorities including the US Internal Revenue Service as customers, is now valued at US$8.6 billion. Additional investors in this round, all of whom invested in earlier rounds, include Blackstone, Bank of New York Mellon, and Palo Alto, California-based venture capital firm Accel.
GIC’s investment comes amid a cryptocurrency sell-off that saw bitcoin fall below US$27,000 on Thursday, a level not seen since late December 2020. The second-largest token, ether, is trading 60 per cent below its peak last November.
The fall in cryptocurrency prices has come in tandem with dropping values for other risky assets, such as stocks and high-yield bonds, amid heightened fears of a global recession that could be exacerbated by more rate increases from the US Federal Reserve this year.
Cryptocurrencies increasingly play a role in money-laundering activities and illicit fund flows linked to sanctioned nations. Therefore more national agencies are relying on data from blockchain-analytics firms, such as Chainalysis and London-based rival Elliptic, to help bust criminal activities and prevent sanction evasions.
GIC is the first sovereign wealth fund to invest in Chainalysis, according to data from venture-capital tracker Crunchbase.
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GIC has made the investment in Chainlysis due to “the increasing demand for trust and safety in the overall industry,” said Choo Yong Cheen, its chief investment officer for private equity.
Chainalysis, which employs more than 700 people globally after adding 450 employees last year, said it will use the new funds to invest in product innovation and expand global operations. It said it is looking to fill 370 job openings.