On January 13th, Blockchain analysis firm Chainalysis has announced that it has acquired AI backed firm Alterya for $150 million to boost AI-powered security services.
The move comes amid a rise in scams, hacks and illegal activities that employee crypto and blockchain networks. Such scams can likely be tackled if found and detected early, something that AI can help significantly.
Alterya Acquisition: Why is This Important?
Alterya wad created AI technology that employs agents to identify and stop fraud against cryptocurrency service providers and has been founded by Coinbase, Square, and Binance.
Since its covert launch, Alterya has already started collaborating with leading financial institutions, fintech firms, and cryptocurrency exchanges like Binance, Coinbase, and Block to monitor over $8 billion in monthly transactions across fiat and cryptocurrency rails in order to safeguard 100 million end users against the increasing risk of authorized fraud.
Chainalysis said in the report “Fraud and scams have long been a scourge on the financial services industry, from the rise of credit card fraud to today’s sophisticated social engineering scams.”
It adds, “Generative AI makes fraud more scalable and affordable to conduct — scammers can easily produce high-fidelity fake content and identities, deceiving users across social media and communication platforms to authorize payments under false pretenses. “
Chainalysis To Offer Fraud Protection
Through this acquisition, Chainalysis will now able to offer exchanges, blockchains, and wallet providers improved fraud detection during KYC as well as real-time proactive fraud protection for payments.
Alterya has already assisted leading cryptocurrency exchanges in reducing disputes linked to scams, increasing the efficiency of manual procedures, and reducing fraud by 60%.
Chainalysis’ efforts to offer a comprehensive risk solution that incorporates preventive, compliance, and remediation have advanced significantly with the acquisition of Alterya.
Alterya’s goal of safeguarding people worldwide against fraud and scams, which are among the top categories of cryptocurrency crime in terms of annual revenue, is essential to Chainalysis’ goal of fostering blockchain trust.
Chainalysis’ Acquisition Comes as Crypto Industry Sees Rise in Scams
Chainalysis acquisition of Alterya comes at a time when cryptocurrency-related theft has steadily increased in 2024. The firm’s recent analysis shows that cryptocurrency hacking is still a major threat, with over $1 billion worth of bitcoin being stolen in four years in a row over the past ten years.
In 2024, the concerning milestone will be reached for the sixth time, showing how the potential for theft rises in parallel with the popularity and worth of cryptocurrencies.
There were 303 hacking incidents in 2024, compared to 282 in 2023, and $2.2 billion in stolen funds, an increase of roughly 21.07% year over year (YoY).