A look at Chainalysis’ Crypto Incident Response Service

Yesterday, blockchain and transaction analytics provider Chainalysis launched its Crypto Incident Response tool, a new service to assist businesses injured by attackers who ransomed cryptocurrencies.

In the event of a security breach or ransomware attack where cryptocurrency funds are demanded or stolen, the affected organization can contact Chainanalysis’ team of consultants and data scientists via a 24/7 hotline, who will then trace the funds and find them marked for recovery.

This relatively new approach of combining cryptocurrency protection with incident response provides businesses with a tool they can use to attempt to recover lost or stolen funds.

Why Are Crypto Incident Response Services Emerging Now?

The release of the Crypto Incident Response solution comes as the number of ransoms being paid by companies continues to increase.

Research shows that payments associated with ransomware attacks totaled $590 million in 2021 alone, compared to $416 million in 2020.

One of the main reasons for the high payouts is the evolution of the ransomware-as-a-service (RaaS) industry and how attackers are becoming adept at identifying, encrypting, and exfiltrating critical assets for maximum impact to obtain their victims .

Victims of these cyberattacks not only have to worry about the huge cost of a ransomware attack that can cause disruption up front, they also have to worry about advanced techniques and what might happen next if attackers threaten to steal the data to publicly disclose .

The evolving threat landscape has helped bring the average cost of a ransomware breach to a total of approximately $4.62 million in 2021.

How Crypto Incident Response Services Can Help Protect Businesses

While there are many anti-ransomware solutions out there, crypto incident response services are unique in that they can assist organizations that have been “checkmated” by a threat actor and forced into paying a ransom demand.

“Following an incident such as a hack, ransomware attack, code exploit, or flash loan attack where cryptocurrency funds are either claimed or stolen, the victim can contact the 24/7 Chainalysis Crypto Incident Response Contact the hotline,” said Erin Plante, senior director of investigations and special programs at Chainalysis. “Chainalysis will then assign a dedicated team of experts using advanced investigative skills to work 24/7 and side-by-side with the victim organization. If needed, the Chainalysis team can assist in liaising with law enforcement and asset recovery advisors.”

With this service, Chainalysis wants to offer organizations a way to react immediately. This allows corporate teams – should they ever find themselves in a position to pay a ransom – to begin tracing funds immediately, with support and the potential to recover some of the funds.

Calling on an incident response team to trace the stolen funds provides another tool for organizations to either de-leverage an attack in the early stages of a ransomware attack, or to do damage control and attempt to trace their funds to a ransom was paid.

The Crypto Incident Response Market

The launch of this service comes as the broader incident response market continues to grow. Researchers estimate the market at $3.48 billion by 2020. It is expected to reach $10.13 billion by 2026 as more companies seek outside assistance to detect and respond to security incidents react .

It’s important to note that Chainalysis isn’t the first provider to offer an incident response service tailored to crypto theft, but the market as a whole is still in its infancy.

One of the organization’s most comparable competitors is blockchain investigation agency CipherBlade, which offers incident response and investigation services that can monitor crypto movements in real time to seize and recover over $100,000 in stolen funds.

CipherBlade’s Crypto Incident Response Service reportedly helped Ian Balina, an influential blockchain and cryptocurrency investor, recover his funds after attackers stole $2 million in crypto. The organization also works with crypto exchanges and wallet providers including Bittrex, Bitbuy, Coinomi, EtherDelta, Changelly, ShapeShift, Shakepay and My Crypto.

While there are other similar, less defined incident response services that delve into crypto recovery services, Chainalysis and CipherBlade are two of the most comprehensive in terms of asset recovery.

However, Plante argues that Chainalysis’ data lineage sets it apart from the competition, using more than seven years of historical blockchain data to maximize the chance of uncovering stolen funds.