- Blockchain analytics and forensic company, Elliptic, issues statement denying sharing personal data
- Chainalysis echoed similar comments in a conversation with The Block
Citing recent reports claiming it had inappropriately gathered user data, Blockchain and Forensic analysis company Elliptic released a statement stating it denies collecting or distributing any personal information.
“I have been disappointed to see reporting in the past few days which has incorrectly implied that Elliptic is distributing personal information for financial gain,” the firm’s co-founder and CEO Dr. James Smith wrote.
“Such comments fundamentally misunderstand the data we analyse, the insight we share with our clients, and the role we play in the industry.”
According to Smith, Elliptic has never had access to users’ personal information, noting that exchange clients, including Coinbase, have never provided it.
The firm’s standard AML and forensic tools use a practice known as “transaction screening,” which validates the source or destination of funds on a transaction, without the need to process or view transaction data that includes names, addresses, and Social Security numbers. Rather, the company screens transactions for clients by providing transaction hashes, input/output wallet addresses, and the direction of fund flows. Elliptic also offers random unique indentifers known as customer IDs for exchange clients looking to analyze transaction behavior at a customer level, but reiterated the firm never requests nor holds KYC data.
“We only allow our solutions to be used in order to combat financial crime, and do not allow it to be used for marketing, business intelligence, or any other purpose,” said Smith.
The firm later confirmed with The Block that it is still a Coinbase partner, and that its third-party data sharing model involves fund-flow data, or telling its clients when funds have been received from trusted counter-parties. “We believe this data sharing model – one that does not undermine the privacy of individual users, but instead promotes the fast and accurate identification and sharing of illicit activity – is in the best interests of everyone trying to build a business in the crypto economy,” said Elliptic in a FAQ on data sharing policies.
Elliptic’s not the only blockchain analysis firm looking to clear the record, with Chainalysis Co-Founder and COO, Jonathan Levin echoing similar comments to The Block.
“It is very important that we clarify that we do not collect personal identification information from our exchange customers. we believe that by monitoring crypto transaction for noncompliant behavior on exchanges that we can build trust that will allow it to be a medium of exchange around the world,” said Levin.