In recent days following the horrific terrorist attack by Hamas in Israel, we have seen overstated metrics and flawed analyses of terrorist groups’ use of cryptocurrency, and feel compelled to address some misconceptions. 🧵 Failing to ID service providers can inflate terrorism funding estimates and lead to the identification of incorrect cashout destinations. Crypto is inherently traceable, but this pitfall can hinder investigations and efforts to disrupt terrorism financing. chainalysis.com/blog/cryptocur…

THREAD: [1/6] Today, the EU Parliament voted to pass MiCA - the first comprehensive, EU-wide rules for crypto asset service providers and different crypto assets (including stablecoins). [2/6] TL;DR: MiCA was first presented by the Commission in September 2020, as part of the wider digital finance package, including DORA (Digital Operational Resilience Act) & DLR pilot regime for wholesale uses.

1/ Our data suggests that FTX’s demise hasn’t been crypto investors’ biggest issue this year. Both the depegging of Terra’s UST token & the collapse weeks later of Celsius & Three Arrows Capital (3AC) drove much bigger realized losses. 👉 bit.ly/3j5Dc3Z 2/ Using the methodology described in our blog, we calculate the weakly realized gains and losses of all personal wallets over the course of 2022. bit.ly/3j5Dc3Z

There is a lot happening today concerning the ongoing fallout around FTX. We’re compiling relevant links and information here. 🧵 Right now, John J. Ray III, who was brought in to lead FTX and oversee the bankruptcy, is testifying before the House Financial Services Committee. You can watch that here:

1/ Big picture: FTX’s collapse has shaken the #crypto market. But this is not the first time crypto has faced significant turmoil related to the collapse of an exchange. 2/ Mt. Gox’s collapse in Feb of 2014 did likewise, and since then crypto has thrived. To make sense of the implications of FTX, we need to put the event into historical context. Research lead @EricJardine7 compares the collapse of the two exchanges. 🧵

🚨1/ Funds stolen from FTX are on the move and exchanges should be on high alert to freeze them if the hacker attempts to cash out 2/ Reports that the funds stolen from FTX were actually sent to the Securities Commission of The Bahamas are incorrect. Some funds were stolen, and other funds were sent to the regulators.

1/ After four hacks yesterday, October is now the biggest month in the biggest year ever for hacking activity, with more than half the month still to go. So far this month, $718 million has been stolen from #DeFi protocols across 11 different hacks. 2/ At this rate, 2022 will likely surpass 2021 as the biggest year for hacking on record. So far, hackers have grossed over $3 billion dollars across 125 hacks.

1/ Eastern Europe is the fifth-largest #crypto market we studied in this year’s Geography of Cryptocurrency Report.

In this 🧵we cover key trends in the region.

Read the blog to get a full overview! bit.ly/3TfSNLf 2/ Eastern Europe #crypto market had $630.9 billion in value received on-chain between July 2021 and June 2022. That represents just over 10% of global transaction activity during the time period studied.

1/ Today at #AxieCon, Senior Director of Investigations @eeplante joins the @AxieInfinity team to deliver good news… 2/ With the help of law enforcement & leading orgs in the #crypto industry, more than $30M worth of #crypto stolen by North Korean-linked hackers has been seized.

In this thread, we discuss how the Chainalysis Crypto Incident Response team played a role. bit.ly/3x8Nq86

1/ We're 2 weeks away from this year's @AnitaB_org Grace Hopper Celebration! 🎉 #GHC22 #Web3AtGHC ghc.anitab.org 2/ Don't miss out on our events where #WomenInTech from Chainalysis will be answering questions like:
👉What is web3?
👉What is #blockchain analysis?
👉Why is it important to build trust in this new tech?

1/ How will the Ethereum merge impact the #crypto ecosystem?

In this thread, we look into 3 questions on staking, institutional adoption, and mining to determine the potential impact on crypto markets. bit.ly/3QmSaxF 2/ First question: Will The Merge spur more staking activity on the Ethereum #blockchain?

1/ Mixers are receiving more #crypto than ever in 2022. The 30-day moving avg reached an all-time high of $51.8M worth of crypto on 4/19/22, roughly doubling incoming volumes YoY. Let's break down the increase in mixer usage & where those funds are going. bit.ly/3uIApAQ 2/ Mixers are designed to provide more privacy in #crypto transactions and can be used to obfuscate the source of funds. They create a disconnect between the #crypto funds that users deposit and what they withdraw, making it more difficult to trace the flow of funds.

1/ What happened to BiFi.finance?

Let’s investigate with Storyline.

On July 8th, a hacker exploited a vulnerability in BiFi’s smart contracts to permanently “borrow” $2.25 million worth of Ether (1,853 ETH).

Exploit tx: bit.ly/3nRqDbV 2/ The hacker both financed the attack and laundered the funds through tornado.cash, an Ethereum mixer.

The proceeds were mixed in increments of 100 ETH at first, then 10.

The NFT gaming-focused @Ronin_Network announced today a loss of over $625M in USDC & ETH, making it the largest-ever DeFi exploit. We can confirm Chainalysis is tracking the funds on their behalf.

https://twitter.com/Ronin_Network/status/1508828719711879168

Unfortunately, the hack of @Ronin_Network is the latest in a series of DeFi thefts. In 2021, $3.2B in crypto was stolen from individuals and services — 6x the amount stolen in 2020. ow.ly/ZCRG50IvnEa

As Russia’s invasion of Ukraine continues, crypto is taking on an important role in the conflict.

So far, users around the world have donated over $56M in aid to Ukraine. But many are wondering if and how crypto may allow for sanctions evasion.
ow.ly/329g50IubWV What could crypto-based Russian sanctions evasion look like?

There are a few on-chain indicators that we’re monitoring. We’ll walk you through those below.🧵
ow.ly/329g50IubWV

Yesterday, the U.S. Treasury Department announced extensive sanctions against Russian businesses and elites following the country’s invasion of Ukraine. This has prompted many to ask Chainalysis how Russia may attempt to use cryptocurrency to evade sanctions. As is true in traditional finance, some may use crypto for sanctions evasion. But the inherent transparency of blockchains combined with Chainalysis data & tools gives governments and crypto businesses the ability to identify transactions by sanctioned entities and take action.

Which criminals hold the most #crypto?

We can investigate 🔎 this by analyzing the balances of criminal whales. 🐋

Let’s break down how we define criminal whales, how we analyze them, and why tracking their activity is so important.

<<🧵THREAD>> What is a criminal whale? 🐋

We define a criminal whale as any private wallet holding $1M or more worth of #crypto that has received 10% or more of its funds from illicit addresses.

ow.ly/VbEq50HYFe4

Kicking things off at #Links22 London shortly! We have an amazing lineup of speakers: @Gemini @PaulWeissLLP @BNYMellon @GoldmanSachs @FISGlobal @HMRCgovuk @PoliceChiefs @asset_reality @GrantThornton @IRSnews @ConsenSys @NCA_UK @Ledger @TheFCA

ow.ly/h6jA50HZaIH Follow along as we report live from #Links22 London. If you haven’t already, sign up for the livestream 🎥ow.ly/h6jA50HZaIH

🧵<<THREAD>>

Over the last several days, we’ve seen media outlets publish faulty blockchain analysis related to the movement of funds by #DarkSide, the #ransomware group behind the Colonial Pipeline hack.

https://twitter.com/chainalysis/status/1454142695874695170

Blockchain analysis firms erroneously identified DarkSide’s movement of funds as a simple peel chain, without identifying the mixer involved. They incorrectly traced the funds to exchanges & other services based on that conclusion. bit.ly/3pSSDxU

THREAD: Based on our blockchain analysis, we can confirm reports speculating that DarkSide #ransomware group has rebranded to BlackMatter. This is part of a trend in which ransomware groups shut down & reemerge with new names, often after law enforcement actions or media scrutiny Chainalysis was able to confirm the financial connection between DarkSide and BlackMatter in late July '21 a few days before security researchers speculated there was a connection based on similarities w/ their encryption algorithms, decryptors, and more: bleepingcomputer.com/news/security/…

THREAD: Here's a quick summary of our blog on on the Bitcoin donation made in December to alt-right groups and figures involved in last week's violence at the Capitol.

https://twitter.com/chainalysis/status/1349785259899027457

Alt-right personality Nick Fuentes, who was pictured outside the Capitol but denies entering, was by far the biggest beneficiary of the donation, receiving roughly $250K. bit.ly/38J9quj