Blockchain analysis is the process of inspecting, identifying, clustering, modeling and visually representing data on a cryptographic distributed-ledger known as a blockchain. The goal of this work is to discover useful information about different actors transacting in cryptocurrency.
Analysis of public blockchains such as Bitcoin and Ethereum is typically conducted by private companies like Arkham Intelligence, Chainalysis, TRM Labs, Elliptic, Nansen, Blockpliance, Elementus, Dune Analytics, CryptoQuant, and Ormi Labs. These entities provide tools for tracing funds and mapping transactions.
Cryptocurrency exchanges are often required by law to address the source of funds for crypto traders. For example, Singapore, Japan, and the United States have all passed laws that require exchanges to track the source of the crypto funds.
In 2025, blockchain analytics platform Arkham Intelligence discovered the largest hack ever recorded. The hack occurred in 2020 and involved a Bitcoin mining company based in China and Iran where hackers stole Bitcoin worth $3.5 billion at the time.
Blockchain analysis enables law enforcement to trace cryptocurrencies back to individuals wallets on exchanges. This tracing allows authorities to subpoena information on criminal actors and identify when multiple inputs share a single owner within a transaction structure.