TLDR

  • Chainalysis has acquired Web3 security firm Hexagate for an undisclosed sum

  • Hexagate’s technology has protected over $1B in customer funds through real-time threat detection

  • Crypto thefts increased 84% to $1.58B in first 7 months of 2024

  • Investment fraud in US hit record $4.57B in 2023, with crypto scams accounting for 87%

  • Major clients like Coinbase and Uniswap use Hexagate’s services, with 98% hack detection rate

Blockchain analytics company Chainalysis has purchased Web3 security provider Hexagate, aiming to strengthen its defense against the rising wave of crypto hacks and scams. The deal, announced on December 18, comes at a time when cryptocurrency theft and fraud continue to plague the industry.

The purchase price remains undisclosed, but Chainalysis CEO Jonathan Levin emphasized the importance of preventing crypto theft rather than just tracking stolen funds. “We have spent 10 years following the money. Now it’s time to prevent the money from being stolen,” Levin stated on social media.

We have spent 10 years following the money. Now it’s time to prevent the money from being stolen. Welcome to the era of secure smart contracts with proper monitoring and real-time threat detection. Announcing our acquisition of @hexagate_ https://t.co/05Bhy3R1ey

— Jonylevin (@jony_levin) December 18, 2024

Hexagate brings valuable technology to the table. Their system uses machine learning to spot and stop various blockchain risks, including hacks, cyber attacks, and problems with blockchain governance. The company has already protected more than $1 billion in customer funds through its real-time threat detection and automated response systems.

Several major crypto companies trust Hexagate’s services. Coinbase, Consensys, and Uniswap are among the high-profile clients using the platform. According to company data, Hexagate’s systems have detected over 98% of known hacks before they happened in the past two years.

The timing of this acquisition aligns with concerning trends in crypto crime. Chainalysis’s own data shows that stolen crypto funds jumped 84% in the first seven months of 2024, rising from $857 million to $1.58 billion compared to the same period last year.

Ransomware attacks have also increased slightly. Payments to ransomware attackers grew from $449.1 million to $459.8 million, putting 2024 on track to set a new record for such criminal activities.

The broader picture of crypto-related fraud is equally troubling. The FBI reported that investment fraud in the United States reached an all-time high of $4.57 billion in 2023. Crypto scams made up most of these losses, accounting for $3.96 billion – nearly 87% of the total.

This represents a sharp increase from previous years. The 2023 figures show a rise from $3.3 billion in 2022, and an eighteen-fold jump from 2018’s $253 million in losses.

By combining forces, Chainalysis and Hexagate aim to create a more complete security solution. The merged technologies will cover prevention, compliance, and fixing problems after they occur.

The partnership comes as criminals shift their focus. Recent reports indicate that hackers are increasingly targeting centralized exchanges rather than decentralized platforms, a change from patterns seen in the previous four years.

These attacks have become more sophisticated. Criminals now use advanced social engineering tactics to breach security systems, making prevention more challenging but also more crucial.

CEO Levin acknowledged how these crimes impact the crypto industry. When hackers steal funds, projects often have to shut down, and investors lose trust in the system.

For companies handling cryptocurrency, security has become a top priority. The integration of Hexagate’s technology with Chainalysis’s existing tools aims to help businesses protect themselves before attacks happen.

The combined company will focus on monitoring smart contracts and detecting threats in real-time. This proactive approach marks a shift from Chainalysis’s traditional role of investigating crypto crimes after they occur.

Despite current challenges, Levin expressed optimism about the future of blockchain technology. He believes that with proper security tools in place, Web3 can become “the world’s safest financial system.”

The post Chainalysis Expands Security Operations with Hexagate Purchase appeared first on Blockonomi.