Chainalysis Inc., a blockchain startup based in New York, has announced that it has raised $1.6 million in a seed funding round led by Point Nine Capital. Techstars, Digital Currency Group, Funders Club, and Converge VP also invested in the round.

In addition, in a move to fight online crime, the company said it has signed a Memorandum of Understanding (MoU) with Europol's European Cybercrime Centre (EC3). Citing a report by Europol, Chainalysis said that cybercrime is growing by leaps and bounds with criminals leveraging different aspects of cloud infrastructure and often extorting their victims in digital currency Bitcoin. It added that it aims to change this by tracking digital identities on the blockchain.

"We have worked extensively with regulated entities and law enforcement agencies in US, Asia, and Europe to help protect people and businesses from cybercrime attacks. This new collaboration is an important next step in the endeavour to move digital currencies out of the hands of the criminals and into the hands of consumers and blooming commerce”, said Michael Gronager, CEO of Chainalysis, in a statement.

The MoU between Europol and Chainalysis on collaboration and information sharing to tackle cybercrime will bring advanced private sector technology into public efforts in the fight against cybercriminals. The company said that it plans to expand its regulatory technology platform to enable more companies to safely transact on a blockchain.

"Chainalysis brings a level of expertise that will be of significant benefit to our Europe-wide investigations. I look forward to developing a rewarding partnership that will make the people and businesses of Europe safer online”, Steven Wilson, Head of Europol's EC3 added.

Chainalysis said that its software detects suspicious activity in real time and provides investigation tools for law enforcement to tackle cybercrime. Chainalysis enables banks to provide services to blockchain-based companies, by leveraging the blockchain to provide banks with reports on each company’s activity. This gives banks greater visibility into the risk of banking these services compared to businesses that do not operate on the blockchain.