Chainalysis partners Lukka to integrate off-chain data in VASP risk product

Chainalysis partners Lukka to integrate off-chain data in VASP risk product

Blockchain analytics firm Chainalysis has teamed up with data and software provider Lukka to enhance its Virtual Asset Service Providers (VASPs) risk management product. VASPs are key players in the crypto ecosystem, offering access and services to both retail and institutional users. However, these platforms also pose certain risks that users need to assess before engaging with them.

Chainalysis' “know-your-VASP” feature enables users to examine on-chain transactions, helping them better understand their exposure to risks from various VASPs. This tool is valuable for financial institutions, crypto businesses, regulators, and other users, providing automatic alerts on risk scores to track platforms with potential illicit activity. In 2024, illicit addresses were responsible for over $40 billion in transactions, highlighting the importance of such monitoring.

The collaboration with Lukka adds off-chain data integration, further improving the VASP risk analysis. This new feature combines both on-chain and off-chain data to screen crypto platforms, including regulatory licenses, legal entity names, and jurisdiction details.

Chainalysis emphasizes that having comprehensive visibility into a VASP’s on- and off-chain characteristics is essential for thorough due diligence and compliance. The integration allows users to quickly assess whether a VASP warrants further investigation, ultimately saving time and resources in the process. This enhancement is expected to improve risk detection, boost compliance, and foster better customer protection across the crypto industry.

Blockchain analysis firm Chainalysis has announced a partnership with data and software solutions provider Lukka to improve its Virtual Asset Service Providers (VASPs) risk product, offering a more comprehensive solution for assessing risks in the crypto ecosystem. VASPs, which facilitate access to crypto for both retail and institutional users, play a vital role in driving market adoption but also come with specific risks that can impact users’ investments and security.

Chainalysis’ new “know-your-VASP” feature aims to help users better assess and mitigate these risks by allowing them to analyze on-chain transactions. This tool enables financial institutions, crypto businesses, regulators, and individual users to evaluate the exposure and counterparty risks associated with different VASPs. It includes real-time monitoring, offering alerts on risk scores to notify users of any concerning activity. In a market where illicit addresses received over $40 billion in 2024, such tools are becoming increasingly important for maintaining the security and integrity of crypto transactions.

The integration of off-chain data through the partnership with Lukka further strengthens this offering. The new capabilities will allow users to assess both on-chain and off-chain characteristics of VASPs, such as regulatory licenses, legal entity names, and jurisdiction information, providing a more complete picture of each platform’s risk profile. Chainalysis emphasized that the ability to combine on-chain transaction analysis with off-chain data is essential for thorough due diligence and compliance, helping users make informed decisions about whether to invest time and resources into further vetting a VASP.

With the rise of illicit activities and market manipulation, including the ongoing issue of pump-and-dump schemes, these new features aim to enhance the ability of businesses and regulators to track and detect suspicious activity. By providing organizations with insights into potential risks, the integration is expected to help improve detection capabilities, strengthen compliance efforts, and promote a safer environment for crypto users.

This collaboration underscores the growing need for transparency and security in the crypto market as it continues to evolve. By offering actionable, real-time insights, Chainalysis and Lukka’s partnership sets a new standard for how risk management tools in the crypto industry are developed, ensuring a safer and more compliant ecosystem for all participants.