Chainalysis’ head of investigations, Elizabeth Bisbee, testified in a June 23 hearing that she was unaware of scientific evidence for the accuracy of Chainalysis’ Reactor software used by law enforcement. This is a serious threat to the crypto ecosystem, as the software is used widely across the industry for compliance, and has at times led to unjustified account restrictions and – even worse – land unsuspecting individuals on the radar of law enforcement agencies without probable cause.
Renowned lawyer Tor Ekeland is making the argument that Chainalysis’ Reactor is a black box algorithm that relies on junk science. Bisbee was unable to provide the court with statistical error rates for Chainalysis’ Reactor software, and denied being aware of any scientific peer-reviewed papers or anything published anywhere attesting to the accuracy of Chainalysis Reactor. Instead, Chainalysis reportedly judges its software’s accuracy using customer feedback.
Coinbase, a competitor of Chainalysis, describes blockchain analytics as more of an art than a science. Chainalysis noted in a July 18 court declaration that there is no doubt about the Reactor software’s findings, but that it is unaware of margins of error rates for the software, and has not gather and record false positive and negative rates for its software overall.
Unfortunately for Bisbee and her corporate overlords, criminal convictions prerequisite the existence of scientific evidence.