What is the Chainalysis oracle? A free tool that allows anyone to validate “if a cryptocurrency wallet address has been included in a sanctions designation.” Pretty handy, considering all the canceling and restricting going around all over the world. Is this positive for the planet as a whole? It depends on your perspective. Is this positive for the crypto space? Absolutely not.
If the crypto space is not neutral, what are we doing? These cryptocurrencies are supposed to be for everyone. And Chainalysis release the smart contract-based tool for free to cause maximum damage. However, there’s a case to be made for Chainalysis’ stance.
The governments of the world are using finance as a weapon, and they perceive the crypto space as a threat to those measures. Chainalysis is helping individuals and institutions to comply with the law, and they’re doing it free of charge. Regardless of your position on the sanctions, companies have to and should comply with the law.
So, let’s stop with the politics and talk about the tool’s characteristics.
What Is The Chainalysis Oracle?
According to the official documentation, the tool will analyze EVM-compatible networks’ wallets. That is, Ethereum, Polygon, BNB Smart Chain, Avalanche, Optimism, Arbitrum, Fantom, and Celo. It will tell you if said wallets have been included in any sanctioned lists.
“The smart contract is maintained by Chainalysis on a variety of popular blockchains and will be regularly updated to reflect the latest sanctions designations listed on economic/trade embargo lists from organizations including the US, EU, or UN.”
So, it’s a simple but powerful tool that will surveil EVM-based wallets. To begin with.
ETH price chart for 03/11/2022 on Eightcap | Source: ETH/USD on TradingView.com
What Do They Mean With “Sanctioned”?
Considering the chaotic state of the world, it’s very important to make clear what relevant concepts mean. In this case, for surveillance firm Chainalysis, “sanctioned” means:
“Sanctioned entities refer to entities listed on economic/trade embargo lists, such as by the US, EU, or UN, with which anyone subject to those jurisdictions is prohibited from dealing. Currently this includes the Specially Designated Nationals (SDN) list of the US Department of the Treasury’s Office of Foreign Assets Control (OFAC).”
So, this is a very Western tool. In the OFAC’s case, for example, sanctions are:
“Based on US foreign policy and national security goals against targeted foreign countries and regimes, terrorists, international narcotics traffickers, those engaged in activities related to the proliferation of weapons of mass destruction, and other threats to the national security, foreign policy or economy of the United States.”
So, if the governments of the world weren’t using economic sanctions as a weapon, this tool would be far less controversial.
What Else Do We Need To Know About The Chainalysis Oracles?
“The smart contract is available for anyone to use and does not require a customer relationship with Chainalysis.” I.E. They’re free to use.
“Chainalysis cannot guarantee the accuracy, timeliness, suitability, or validity of the data.” Which is understandable for a free tool.
In conclusion, surveillance firm Chainalysis does it again. What a phenomenal PR move for the crypto world’s snitches. The company continues to be Big Brother’s best friend and releases a controversial tool that a large part of the population will deem positive. For free.