Crypto analytics is one of the fastest growing and most prized sectors of the nascent industry. As more institutional money is poised to enter the space, accurate data around cryptoasset transactions, fund movements and fees will likely become essential. Earlier today (May 8th) Binance exchange suffered a 7,000 Bitcoin ($40 million) hack and it is events like these that make crypto analytics so important.
Scorechain is a crypto analytics company that seeks to cater to this growing demand by providing platforms that aim to make AML and KYT (Know Your Transaction) processes far smoother for companies.
Pierre Gerard, co-founder and CEO of Scorechain, began his bitcoin and blockchain journey in 2014, creating Yallet – one of the first mobile Bitcoin wallets for iOS. Founding Scorechain in 2015 with €500,000 of funding, he has led the company to provide AML tools for more than 40 companies worldwide.
We asked Pierre about the company’s offering, how the company tracks and analyzes transactions, and their stance on Bitcoin anonymity.
What is Scorechain’s core product?
Scorechain provides a Bitcoin Analytics, Ethereum Analytics (ERC20 tokens and stablecoins), and Litecoin platform for now, which help crypto-related companies to fulfill crypto AML compliance requirements and to implement KYT (Know Your transaction) policies. With these tools, our customers can check the origin and destination of crypto funds, monitor in real time crypto transactions, and generate reports. We are currently developing the same analytics tools for Bitcoin Cash, Ripple, EOS and more.
Who are your intended customers?
Our customers include exchange platforms, OTC trading desks, ICOs, private banks, audit firms, custodians and asset managers all over the world.
What sort of analytics and metadata can Scorechain provide on an average bitcoin transaction?
With Scorechain Bitcoin Analytics platform, our customers can get transaction value, fees, date, sender and recipient, risk scoring, bitcoin flow track, etc… Moreover, they can customize scoring to implement their own compliance policy, set up alerts to realise real-time monitoring, follow activity of their clients to do specific monitoring with blacklist and whitelist, export reports, etc…
Besides blockchain data, does Scorechain use other data sources to add further forensic analytics, such as mapping KYC information from exchanges to transactions?
Yes, we construct our database thanks to our data scientists who are interacting every day with crypto services. We are also running web crawlers, importing public information and we are working with partners who provide us with external information. Data quality is a key factor for the success of our offers and we are keeping on improving our data quality, and that’s why our clients like our products.
Do you think fully anonymous bitcoin privacy features would help or hinder adoption of bitcoin?
We think that a fully private and anonymous cryptoassets cannot develop properly in a large ecosystem. A reasonable balance has to be struck between privacy and regulation. A Bitcoin user wants to know with whom he is dealing and exchanging bitcoins; the same is true for companies.
If fully anonymous bitcoin transactions were made possible how would this impact Scorechain?
Scorechain’s aim is not to deanonymize addresses, we identify companies and professional services in the Blockchain but we do not try to identify individuals. We provide on-chain analytics and business intelligence using public information. There are a few anonymous blockchains and they are less used than Bitcoin.
What types of entities can you map onto addresses? E.g. Exchanges, dark net markets etc.
Potentially all types of activity can be identified, darkweb, donations, exchange, gambling, miners, mining reward, mixing services, mixing transaction, OFAC sanction list, scammers, etc.
What percentage of addresses/transaction on the bitcoin network has Scorechain mapped into clusters?
More than 50% of addresses/transaction on the bitcoin network Scorechain has mapped into clusters, 15% of the overall addresses are identified entities.
How sophisticated do you think on chain analytics can become and what data does Scorechain need to improve the accuracy of its analytics?
There is a focus now on AML compliance and regulation but analytics could be conducted on very different types of information. We don’t share our roadmap publicly, but you can imagine that token activities and STOs, for example, will bring new demand for analytics.