- Chainalysis is one of the oldest blockchain analytics companies in the cryptocurrency space.
- About two-thirds of its revenue comes from government and other public sector agencies.
- CEO Michael Gronager expects that to change.
Blockchain analytics firm Chainalysis has a broad list of government and other public sector clients.
About two-thirds of the company’s revenue comes from its agreements with law enforcement, tax agencies and other government entities, said Michael Gronager, co-founder and CEO. DL News at the Token2049 crypto conference.
However, he expects that to change.
“You will see the private sector outperform the public sector,” he said, referring to Chainalysis’ revenue split.
Stablecoin Rules
His prediction comes as the European Union and other countries pass regulations that require crypto companies to register their activities with the government.
In the EU, the Markets in Crypto-Assets Regulation, or MiCA, came into force in July 2023. Part of the legislation’s mandate includes regulating stablecoins.
The new law stipulates that cryptocurrency businesses must obtain payment licenses and meet reserve requirements.
If more countries adopt new cryptocurrency regulations like MiCA and traditional financial institutions then decide to deal in stablecoins, Chainalysis “will suddenly have 10,000 customers worldwide with huge pockets,” Gronager said.
Join the community to receive our latest stories and updates
Why? These institutions will all have to adhere to the new rules and use blockchain tracking tools, like those from Gronager’s company, to ensure they are compliant, he said.
Saturation point
And Chainalysis may need new, untapped private sector customers to continue growing.
The analytics firm already works with 250 government agencies in 50 countries. There is an upper limit to how many additional contracts Chainalysis can land in the public sector, Gronager said.
“Are there 1,000? Probably not,” Gronager said, referring to the number of government agencies that have yet to sign with Chainalysis. “Are there 300? Probably.”
He said, however, that the size of the contracts the analytics firm has with governments may increase.
In other words, Chainalysis can persuade existing public sector customers to use more products and tools that would bring the company more revenue.
