The ontology explains how Chainalysis considers the role of attribution to these clusters, presenting a two-tier structure; the first level “defines the structural graph”, while the second evaluates the confidence of the analysis in this graph.
“What does that mean these addresses go together, right? It’s clearly because someone believes they’re under the control of the same entity, right?” Illum said. “Maybe it’s an exchange, or maybe a darknet market, or maybe a mixer, or something. But what are the grounds to establish that these things actually go together?”
Investigators likely won’t have private keys, which would be the easiest way to find out if a group of addresses are all controlled by the same entity. So they should look at the on-chain data.
Illum has also been clear about the limitations of this type of analysis: although Chainalysis can conduct research on transactions and clusters, it cannot, on its own, identify the actual end user without additional information.
Chainalysis could track funds to a crypto exchange, for example, or to another entity managing wallets on behalf of clients, but investigators might need to issue a subpoena to identify the client’s identity.
In other words, who controls a wallet or which entity is associated with the wallet are separate questions from the actual aspect of tracing.
