ChainComply vs Blockchain Forensics Tools: The Ultimate Compliance Tools for Financial Institutions
- Lukasz Lukaszewski
- Nov 11, 2024
- 8 min read
Updated: Oct 17
Navigating the compliance landscape in the MiCA (Markets in Crypto-Assets) regulation era can be challenging, especially for traditional financial institutions.
ChainComply’s Enhanced Due Diligence and Blockchain forensics, like Chainalysis, are the two leading tools that help you meet this challenge. In this guide, we will explore the key differences between these tools and how they complement each other.
Based on the comparative table above, you can probably already sense which solution is best for your organization. If you're still unsure, we'll delve deeper into each aspect below.
Target Audience
ChainComply: tailored for financial institutions
ChainComply is purpose-built to assist traditional financial institutions in adapting to digital assets based on two key insights: 1. Banks interact with exchanges, not the blockchain 2. Neither Banks nor crypto-exchanges can spend days on FBI-like investigations with blockchain analysis.
With regulatory shifts like MiCA, banks need a streamlined way to meet new compliance standards without diving into complex crypto forensics. ChainComply streamlines the process by providing a user-friendly interface that enables non-crypto experts to quickly and efficiently handle crypto-related Enhanced Due Diligence (EDD) cases.
Task: Samantha works at the first level of defence at a bank. It's Monday, and she received 50 alerts about incoming transfers from crypto exchanges. She has only 1 hour to check all of them.
Solution: She selects ten most suspicious transactions and uses ChainComply software to start an Enhanced Due Diligence on these clients, asking them to connect their crypto accounts and wallets to retrieve the transaction history. Once the clients provide the data, Samantha spends maximum 30 minutes per case for analysis. She clears nine files out of ten and marks one for further investigation by the Financial Crime Department.”
Here’s what ChainComply does best:
It simplifies crypto compliance by offering an intuitive platform that requires no specialized crypto knowledge and can be used by 1LOD staff.
It speeds up decision-making, allowing AML teams to judge crypto-related cases in just 5 minutes.
It optimizes workflows, reducing manual effort and allowing banks to process more EDD cases seamlessly.
Blockchain forensic tools: designed for investigative forensics
Blockchain forensic tools are designed for a different purpose. It’s a comprehensive tool set that mainly helps entities (like crypto exchanges) to transact on-chain and law enforcement to investigate and prevent criminal activities like fraud, money laundering, sanction evasion, etc. Blockchain forensic tools offer detailed, court-proof-level insights into blockchain transactions, allowing investigators to follow the digital trail and uncover illegal activity.
Task: Martin works in a bank's Financial Crime department. It's Tuesday, and he received a suspicious case from Samantha concerning one of the client's blockchain activity.
Solution: He opens his Blockchain Forensic Tool and drills deeper into clients' risky on-chain transactions. He discovers a suspicious cluster of addresses that looks like a complex investment scam. He reports the case to the authorities.
Key benefits of a blockchain forensic tool include:
Advanced blockchain intelligence - perfect for deep-dive investigations.
Forensic-level capabilities that help track fraudulent activities, money laundering, and other illicit behavior.
Expert-level tools tailored for investigators who need in-depth blockchain data.
At the same time, it is worth adding that some of these tools also offer automated blockchain transaction monitoring software. This is useful when a financial institution, like a crypto exchange, directly transacts on-chain.
The depth of insight: high-level overview vs. deep forensics
ChainComply: quick, high-level Insights
ChainComply is designed to give AML teams and banks a high-level, holistic view of their clients' transactions. Rather than getting bogged down in complex blockchain data, users receive an easy-to-interpret summary that highlights the most important information needed to make efficient compliance decisions at scale.
To drill further, the users can switch to blockchain forensic tools.
Blockchain forensic tool: forensic deep dives into on-chain data
Blockchain forensic tools, on the other hand, deliver detailed blockchain intelligence. They focus on providing forensic experts with the granular data they need to investigate complex fraud schemes, illicit transfers, and other criminal activities occurring on-chain. The tools enable investigators to follow the flow of funds across blockchain networks, often piecing together intricate fraud operations and tracking down criminals.
On-chain vs On-exchange data: why both matter
ChainComply: holistic data for complete risk assessment
While on-chain data is critical, on-exchange data is often the missing piece for traditional financial institutions. On-exchange data, ie, client’s crypto exchange account transaction records, offers essential insights into the source of funds and source of wealth — information that blockchain analysis alone can’t provide. ChainComply combines both on-chain and on-exchange data to give banks the complete picture they need for accurate compliance assessments.
This is especially important for banks that do not deal with crypto, as on-exchange data often serves as the starting point for investigations, providing fundamental information that Blockchain Forensic Tools do not have access to. Integrating these data sources gives ChainComply an edge in helping traditional financial institutions comply with the new crypto regulations under MiCA.
Example 1: Samantha notices that John just sent 200.000 EUR from a crypto exchange X. She uses ChainComply to send John a link to upload the transaction history from exchange X and then asks John to add any other relevant exchanges or non-custodial wallets that John was using.
It is important to note that while ChainComply offers a holistic overview, it is integrating with Blockchain Forensic Tools for on-chain risk assessment. In fact, ChainComply's value would be minimal if it did not collaborate with established blockchain analysis industry leaders.
Blockchain forensic tools: unmatched on-chain intelligence
While ChainComply provides a broader view, blockchain forensic tools specialize in on-chain data analysis. They track and trace all activities recorded on the blockchain, offering unparalleled insights into the flow of funds and allowing investigators to detect and prevent criminal schemes within the crypto ecosystem. Blockchain forensic tools provide a granular level of detail for identifying and investigating illegal activities.
Example 2: The analysis in the ChainComply tool indicated that John has interacted with Dark Market. Martin opens the Blockchain Analysis Tool to investigate what exactly happened and determine whether a Suspicious Activity Report is needed or if law enforcement needs to be informed.
Current wealth assessment
ChainComply gives compliance officers a complete, current wealth view by consolidating a client’s on-exchange accounts, self-custody wallets, and DeFi positions (staking, LPs, lending). It reconciles balances across platforms, surfaces trading and DeFi activity, so the client's holistic crypto-related wealth can be evidenced, not guessed. Blockchain forensics tools, by design, provide on-chain visibility only: excellent for tracing movements between addresses, but they typically don’t see custodial exchange portfolios or value/position data from CeFi accounts, and they don’t produce a consolidated wealth snapshot that spans exchange + DeFi + wallets.
Investment gains and profit assessment
ChainComply pinpoints investment gains by activity and computes capital gains and realised profit with audit-ready breakdowns per token and per platform—using exchange trade histories, wallet activity and DeFi cashflows to show P&L through time. This lets 1LOD teams quickly validate whether wealth growth is consistent with the client’s profile. Blockchain forensics tools focus on risk tracing, not P&L: they may highlight risky flows or counterparties, but don’t reconstruct capital gains, or realised profit, especially when key data lives in exchange order histories. In practice, teams use ChainComply for the wealth and gains picture, and switch to forensics tools for deep on-chain investigations when needed.
Simplifying crypto-compliance vs. preventing crypto crime
Streamline compliance with ChainComply
ChainComply was designed to help enhance operational efficiency in the new crypto assets era as it enables banks and financial institutions to speed up and streamline their due diligence processes, boosting productivity by up to 10x in crypto-related compliance tasks.
Streamlined workflows reduce manual effort in all crypto-related Source of Funds investigation aspects:
Data gathering is digitalized for your crypto holding clients through seamless connectivity to their blockchain wallets and APIs of their crypto-exchange accounts;
Data augmentation is a core service we offer through our network of partners;
Data analysis is quick thanks to pre-flagged risky transactions and easy-to-understand visualizations; informed decisions about client files can now take minutes;
Thorough reporting in one click; ready for internal audit or inspection by a regulator.
For banks and traditional financial institutions seeking a straightforward solution to handle crypto compliance, ChainComply is the ideal choice. Its efficient workflows and integrated data handling allow it to process crypto cases quickly and accurately without needing specialized crypto knowledge.
Dive Deep with blockchain forensic tools
While ChainComply is all about speed and efficiency, blockchain forensic tools excel in handling the more complex, nuanced investigations that come with crypto crime. When you’re dealing with more elaborate criminal networks, they offer the advanced investigative tools needed to uncover the whole story.
This makes blockchain forensic tools the go-to solution for VASPs and law enforcement, who require detailed insights into on-chain activities, need to track down bad actors, or need to monitor their crypto flows in real time.
Which tool is best for you?
ChainComply: perfect for banks and financial institutions
If you are a traditional financial institution or bank looking for an intuitive and efficient way to handle crypto compliance, ChainComply is the ideal solution. With its streamlined workflows and holistic data integration, it’s designed to help you process large volume of crypto-related cases quickly and accurately without needing expert-level crypto knowledge.
Blockchain forensic tools: essential for VASPs and law enforcement
While ChainComply delivers speed and simplicity, blockchain forensic tools offer advanced capabilities for complex investigations. These tools are designed for VASPs and law enforcement agencies tackling intricate cases of fraud, money laundering, and other criminal activities within the crypto space.
Blockchain forensic tools provide in-depth blockchain analytics and detailed investigative insights, making it indispensable for uncovering hidden criminal networks and tracking bad actors. Their sophisticated analytics and forensic capabilities make them a vital resource for anyone transacting on-chain and law enforcement agencies investigating crypto crime.
ChainComply and blockchain forensic tools: a complementary partnership
ChainComply and blockchain forensic tools are not competitors. In fact, they complement each other by providing a full spectrum of crypto compliance and investigative solutions. ChainComply leverages on-chain data from blockchain forensic tools while focusing on on-exchange data and streamlined workflows for compliance teams.
When used together, these tools offer a comprehensive approach to crypto compliance and investigations, allowing financial institutions and investigative bodies to collaborate more effectively and achieve more significant compliance outcomes.
Your Key Takeaways
ChainComply simplifies crypto compliance for financial institutions by providing easy-to-use workflows and on-exchange data.
Blockchain forensic tools specialize in deep-dive blockchain forensics, helping crypto exchanges and law enforcement to detect, track and investigate complex crypto crime.
Wealth & gains clarity: ChainComply consolidates exchange/wallet/DeFi holdings and calculates capital gains & realised profit per token and platform—capabilities traditional blockchain forensics tools don’t provide.
These tools complement each other, offering together a robust solution for institutions navigating the evolving crypto regulatory landscape.
Ready to take your compliance processes to the next level?
Book a demo with ChainComply today at www.chaincomply.io and discover how we can help your organization streamline crypto-related due diligence.
Comments