JPMorgan Chase (JPM) stated on Monday that it will make a “strategic investment” in TRM Labs, a blockchain analysis startup, becoming the latest Wall Street giant to increase its presence in the cryptocurrency sector.
TRM’s and others’ analytics software has become a go-to for regulators and law enforcement organisations wanting to monitor the flow of unlawful crypto transactions. BNY Mellon, the banking behemoth, stated last week that it will begin integrating Chainalysis’s comparable analytics capabilities.
According to Esteban Castano, co-founder and CEO of TRM, the JPMorgan investment “clearly shows the relevance of the expanding crypto economy and the imperative of creating trust and safety in this ecosystem to continue its growth.”
The clients of these blockchain companies
While companies like Chainalysis, TRM Labs, and Elliptic deal with an increasing number of large names in finance, the majority of their clients aren’t revealed.
The Uited Nations Office on Drugs and Crime (UNDOC), the Internal Revenue Service, Revolut, a prominent British fintech, and Robinhood, an online trading firm, all employ blockchain analysis to monitor crypto transactions.
TRM’s last funding round
TRM disclosed a $60 million financing headed by Tiger Global at the end of last year, which also included the venture arm of American Express (AXP), Visa (V), and crypto venture capital company Castle Island Ventures.
TRMs have carved out a place for themselves by tracing crypto transfers across several blockchains, particularly the Solana (SOL-USD) blockchain. Anchorage Digital, a cryptocurrency custodial bank, is among its clients.
JPMorgan CEO Jamie Dimon has been a vocal critic of the industry, but he has recognised the reality of a thriving business in which clients want to invest. Earlier this month, the bank made a stir in the metaverse by launching a virtual lounge on Decentraland, a cryptocurrency-powered virtual reality platform.
Unlawful activities in the Market
According to data, unlawful flows into digital tokens have decreased in the previous year, despite the fact that the entire market value for crypto has more than quadrupled, to $1.7 trillion, during the same time period. Nonetheless, the escalating discussion about cryptocurrency regulation, as well as some high-profile fraud instances, have focused attention on the sector.
While compliance and safety remain the hallmark uses for blockchain analysis, Alkesh Shah, global crypto and digital asset strategist with Bank of America believes that the potential for transaction monitoring tools provided by TRM and similar firms could be leveraged “beyond the problem of illicit transactions.”
He recently stated to a media house that “assist in providing a glimpse of what’s going on in these blockchain ecosystems.” According to that concept, the software can provide institutional investors with a better understanding of which blockchains “are succeeding and which are failing.” “He said.
TRM’s solutions assist customers in mitigating risk and complying with anti-money laundering (AML) regulations. The company also provides a forensics-focused tool that enables law enforcement to examine particular crimes such as theft or fraud that occur on a blockchain.
Such technologies have aided in the transparency of blockchain-powered financial transactions, such as the Department of Justice’s efforts to seize $3.6 billion in Bitcoin stolen from the cryptocurrency exchange Bitfinex in 2016, as well as countless other investigations.
According to Umar Farooq, CEO of JP Morgan’s blockchain platform for wholesale payments Onyx, “leading infrastructure businesses like TRM will assist usher in the future of safe blockchain and crypto use cases.”
