MUFG, Sozo Ventures back crypto compliance startup Chainalysis’s Series B round

Chainalysis, a cryptocurrency compliance and investigation solutions provider, has raised an additional $6 million to close its $36 million Series B round with a strategic investment from Japan's largest financial institution, MUFG, and venture capital firm Sozo Ventures.

The announcement follows a $30 million raise from Accel and Benchmark in February. Chainalysis said that it will use the funding to expand its business in Asia Pacific and plans to open an office in the region.

“This strategic investment will strengthen our relationships with financial institutions in Asia in particular, and spearhead both our growth and the industry's advancement in an important region,” Michael Gronager, CEO, Chainalysis, said.

The investment from MUFG was facilitated via its wholly owned corporate venture capital subsidiary MUFG Innovation Partners (MUIP). MUFG said that the Chainalysis investment is MUIP's first investment outside of Japan and second since its launch in January 2019.

"Chainalysis's compliance technology is important to providing the insight and anti-money laundering controls banks need in order to establish next generation compliance frameworks," said Nobutake Suzuki, President & CEO, MUFG Innovation Partners. "Today's announcement signals our joint commitment to growing the cryptocurrency industry in Japan and Asia Pacific more soundly and broadly."

Earlier this month, MUFG president Kanetsugu Mike told Asahi Shimbun that the company is planning to launch a yen-pegged stablecoin, MUFG Coin, for practical use this year, Cointelegraph reported.

Founded in 2014, Chainalysis offers tools to analyse bitcoin transactions on the blockchain. Over the past year, it launched and deployed its real-time anti-money laundering and compliance software for cryptocurrencies, Chainalysis KYT (Know Your Transaction). It has expanded its coverage beyond Bitcoin to include Ethereum, Litecoin, Bitcoin Cash, and, more recently, stablecoins.

More than 100 financial institutions and cryptocurrency exchanges, including Binance, have signed up for Chainalysis KYT to automate the process of screening transactions and monitoring user activity.