Friday, January 21

Chainalysis puts Bitcoin’s Lightning network under its magnifying glass

The transactions of the network of payment channels Lightning, Bitcoin’s second layer solution, would now be under the scrutiny of governments and companies that use Chainalysis services from next February 2022, according to the statements of this company.

The US company assured in a press release that by adding support for Lightning they would offer their clients the solution to allow deposits and withdrawals of bitcoin (BTC) from a node on the Lightning network. In particular, they refer to cryptocurrency exchanges that use their services and could monitor transactions.

These companies “can now offer support for Lightning transactions aligned with global regulatory best practices. Chainalysis KYT [Conoce tu transacción] will support the preselection of withdrawals from Lightning and behavioral alerts, “he adds Chainalysis in their statement.

Pratima Arora, product director of Chainalysis, assured that her company “exists to generate confidence in cryptocurrencies in order to promote more financial freedom with less risk” in terms of regulations.

The Lightning Network solves many of the challenges that prevent the Bitcoin protocol from being used for micropayments and other types of transactions that reinforce financial inclusion. By enabling our customers to support Lightning transactions in a compliant manner, we hope to increase the popularity of the network and help it scale.

Pratima Arora, Product Director of Chainalysis

What Chainalysis does not expose is how they will be able to track the transactions of the red that allows instant micropayments. As they are not recorded in the Bitcoin ledger, the movements of BTC on this network are not public as on the main Bitcoin chain.

Money and governments against privacy

The company tracks the movement of various blockchains, including Bitcoin. With its studies, it not only serves for law enforcement bodies and other instances to keep their eyes on the money movements of cryptocurrency users for criminal investigations. They also allow tracking for tax purposes, for example.

Chainalysis, which spends hundreds of millions of dollars on its surveillance of blockchains, has been closely associated with governments over time. And perhaps one of the clearest hints of this has been the incorporation of former FBI agent Gurvais Grigg as the company’s chief technology officer, in April of this year, as CriptoNoticias reviewed.

Governments like the United States have been particularly active in their efforts to get their hands on cryptocurrency transactions and go against the privacy that users seek. In fact, in July of last year this media reported the interest of the US tax service (the IRS, for its acronym in English) to track the activity of cryptocurrencies focused on privacy, such as Monero or Zcash, in addition to the Lightning network. The latter would now be possible according to the Chainalysis announcement.