The most important application of blockchain analytics is in the regulatory arena. Crypto-businesses and other financial institutions are using blockchain analytics to mitigate risk and comply with regulatory requirements.

Legal compliance

Blockchain analytics software helps virtual asset service providers ensure legal compliance of their business by implementing tools for risk mitigation and blockchain monitoring. For example, a cryptocurrency exchange may not want criminals using its services for money laundering or other illegal activities. Blockchain analytics tools track every transaction relevant to your business and analyze the risks associated with those transactions. You can also set different rules and standards to meet current regulatory requirements depending on the jurisdiction.

Surveillance and Investigations

Blockchain analytics software plays a crucial role in criminal investigations related to cryptocurrencies. It allows law enforcement agencies to track the movement of funds and identify criminals. For example, a criminal uses some service to convert crypto assets into fiat money. With the help of blockchain analysis tools, the crypto service used can be identified and if it implements a strict KYC policy, it will make it possible to identify the real criminal. Blockchain analysis companies also provide powerful visualization tools for manually guided research and implement various clustering algorithms to identify crypto services.