Chainalysis Acquires Hexagate to Combat Crypto Theft

Blockchain data platform Chainalysis has acquired Hexagate, security provider to companies like Coinbase and Consensys.

“I have long believed that in order to advance the Chainalysis mission to build trust in blockchains, we would need to expand our business beyond investigations and into prevention,” Johathan Levin, the company’s CEO, wrote in a Wednesday (Dec. 18) announcement.

“For the past several years, we’ve seen billions of dollars’ worth of crypto stolen each year — often by actors linked to rogue nations and other national security threats. Thefts of this magnitude can leave victims with no choice but to shut down their crypto projects, investors wary of investing in blockchain initiatives, and bad actors with billions of dollars in their control.”

Levin argued that it doesn’t need to be this way, saying Web3 is “transparent by design” and has the potential to be the world’s safest financial system, given the proper tools.

He added that Hexgate’s suite of services for monitoring, mitigation, forensics and compliance impressed Chainalysis, with the company detecting “all known hacks” in the last two years, more than 98% of them before they occurred.

Shashank Agrawal, head of protocol security at Coinbase, said Hexagate had become an integral piece of the exchange’s on-chain security.

“Their real-time on-chain threat and risk detection and Base ecosystem monitoring solution for all Base builders has provided us with the broadest coverage for Coinbase and Base, ensuring the safety of our users and reinforcing trust across anything we build or do on-chain,” he said in the Chainalysis announcement.

Earlier this year, Chainalysis issued a report showing that the value of crypto funds taken in hacking activities and ransomware attacks climbed in the first seven months of the year, an uptick driven by the higher value of bitcoin and by ransomware attacks on larger organizations.

The report found that stolen funds inflows increased by about 84% in the first seven months of 2024 versus the prior year, rising from $857 million to $1.58 billion.

As PYMNTS wrote earlier this summer, crypto thefts and scams jumped 53% last year according to one estimate, leading law enforcement to “sharpened its focus on the historically opaque sector — a space where criminal ingenuity often outpaces regulatory efforts.”

Crypto-related convictions surged by a whopping 267% in 2023, with law enforcement resorting to creative measures to catch scammers.

For example, the FBI recently charged 18 people in the wake of a sting in which it created its own crypto asset, dubbed “NexfundAI,” and then followed its usage to prove malfeasance and manipulation.

“Instead of flipping the coin for profit, the criminals found themselves at the other end of sealed indictments,” PYMNTS wrote.