New Chainalysis Tool Will Track Stolen Cryptocurrency Across Multiple Chains

Blockchain analytics firm Chainalysis has released a new tool for tracking transactions across decentralized finance protocols and multiple blockchains.

On May 18, Chainalysis launched a beta version of its Storyline software. Storyline, dubbed a “Web3-native blockchain analytics tool,” aims to track and visualize smart contract transactions, with a focus on non-fungible (NFT) and DeFi platforms. This is in line with the growing popularity of NFTs and DeFi in the cryptocurrency space over the past year.

Chainalysis provides blockchain analysis and annual reports on cryptocurrency crime trends and other analysis. The changing landscape has made DeFi and NFTs important cogs in the ecosystem, with Chainalysis estimating that the two industries account for more than half of global cryptocurrency transactions.

An unfortunate downside of this evolution is that more and more cryptocurrency-based crimes take advantage of these industry-changing protocols. In 2021, DeFi protocols are processing more and more value from illegal addresses, and hackers have also begun to target these platforms in an attempt to attack and steal funds.

This figure cannot be understated either, with Chainalysis estimating that DeFi protocols account for 97% of the $1.68 billion worth of stolen cryptocurrencies in 2022. The firm also noted that a large portion of attacks on DeFi last year were carried out by North Korean hacking groups.

The challenge for cryptocurrency exchanges, DeFi protocols, and investigators is tracking illicit transactions through DeFi protocols. The nature of these platforms is complex, with automated smart contracts creating complex transactions, often spanning multiple blockchains.

A key feature of DeFi protocols is the ability to "cross-chain," enabling users to exchange or move cryptocurrencies in one transaction. The process of buying an NFT also involves many moving parts, including different smart contracts on different marketplaces.

Storyline will enable users to build their own transaction path "stories" starting from transaction hashes. From there, notable transactions and token interactions can be created to create a timeline.

An automated feature allows the software to interpret smart contracts and flag common transaction types such as NFT purchases or token swaps. Users can add related transactions and related addresses across blockchains, which can help monitor specific addresses, tokens and transactions.

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