Chainalysis Purchases AI Fraud Detection Company Alterya for $150 Million

Blockchain analytics firm Chainalysis has purchased Alterya, an AI-driven fraud detection startup, for an estimated $150 million, representing its initial significant venture into artificial intelligence (AI).

“With Alterya, Chainalysis is reinforcing its strategy to invest in the prevention of illicit transactions,” the company stated in its blog post dated Jan. 13, following last month’s acquisition of the Web3 security platform Hexagate.

We’re excited to announce our acquisition of Alterya, the AI-driven fraud detection solution that identifies scammers before they reach their victims to provide real-time prevention for fintechs, crypto exchanges, and banks.

Together, Chainalysis and Alterya will deliver a… pic.twitter.com/2FBkhqDthP

— Chainalysis (@chainalysis) January 13, 2025

A “Comprehensive” Approach to Financial Crime

Founded in 2022 and supported by $9.8 million in seed funding from Battery Ventures, Y Combinator, NFX, and Nyca, Alterya employs AI agents to identify and prevent scams targeting financial institutions, fintech, and crypto service providers.

Alterya has previously collaborated with prominent crypto exchanges such as Binance, Block, and Coinbase. This acquisition will enable Chainalysis to enhance its fraud detection capabilities, particularly in the Know Your Customer (KYC) process and real-time payment security.

Chainalysis aims for a “comprehensive” approach to financial crime, integrating prevention, compliance, and remediation. This includes tracing the origins of fraud from traditional finance into the crypto space. Alterya’s expertise in monitoring over $8 billion in monthly transactions across crypto and fiat channels will be vital for Chainalysis to offer new services addressing the financial crime landscape.

Generative AI Fuels Sophisticated Scams

This acquisition occurs amid a rise in crypto-related fraud, with scams costing the industry billions of dollars annually. According to Chainalysis, the emergence of generative AI has further intensified the issue, making fraud more scalable and easier to execute:

“Fraud and scams have long plagued the financial services industry, from the rise of credit card fraud to today’s sophisticated social engineering scams. Scammers can easily create high-fidelity fake content and identities, misleading users across social media and communication platforms to authorize payments under false pretenses.”

Generative AI complicates the ability of financial institutions and crypto companies to detect when scammers “quickly monetize through crypto and real-time payment systems.”

Alterya itself identified $10 billion sent to scams in 2024 and discovered that 85% of scams exploit fully verified accounts, circumventing traditional identity checks.

Effective fraud detection and compliance “rely on granular, real-time data,” and by integrating Alterya’s capabilities with Chainalysis’ blockchain data, Chainlink seeks to enhance both.

Cryptocurrency Crime on the Rise

Cybercriminals continued their persistent assault on the cryptocurrency ecosystem in 2024, stealing over $2.3 billion across 760 reported on-chain incidents, according to CertiK’s Web3 Security Report 2024.

This marks nearly a 32% increase compared to 2023, with criminals averaging $3.1 million per incident.

The figures from 2024 are in, and the Web3 ecosystem faces significant challenges. Over $2.36B was stolen across 760 incidents, reflecting a 31.61% increase from the previous year.

Dive into the 2024 Hack3d Report to explore the insights that shaped the year and what’s next. pic.twitter.com/86QyfYia8M

— CertiK (@CertiK) January 2, 2025

Phishing attacks dominated, emerging as the most common and costly threat. Nearly 300 incidents, resulting in $1.05 billion in losses, were attributed to phishing scams, according to CertiK’s report. These attacks exploit unsuspecting victims by directing them to fraudulent websites designed to steal login credentials and gain control of their cryptocurrency wallets.

Data breaches continue to fuel these attacks, providing cybercriminals with valuable information to tailor their phishing attempts.

A recent example involved a revamped phishing campaign targeting Ledger hardware wallet users, utilizing data leaked in a previous breach.

In December 2024, Ledger users reported that phishing scammers were spoofing the crypto hardware wallet provider’s support emails in an attempt to deceive users into revealing their wallet keys. These fraudulent emails claimed Ledger had experienced a “recent data breach” and urged recipients to verify their private seed phrase under the pretense of needing to “safeguard” their assets.

Hey @Ledger someone has spoofed your REAL support email and is currently sending this to people to get them to reveal their recovery phrase

For a company we’re all pressured to trust for custody of our assets, this isn’t a good look pic.twitter.com/9GIz6wJi3O

— Tony (@0xRacist) December 16, 2024

Despite appearing to originate from Ledger’s legitimate support email, BleepingComputer reported that these emails were actually sent through an email marketing platform.

Ledger responded to an X user concerned about the emails, stating that “scam attempts are an unfortunate part of life online and no one is completely immune.”

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