00:00How would you characterize the way that you saw crypto activity on Iran exchanges change
00:06after the U.S. invasion, or excuse me, not invasion, the U.S. attack on Iran?
00:13Yeah, so great to be here. What we have seen is that, you know, certainly there is heightened
00:18activity of things happening on crypto exchanges within Iran. And I think what people need to know
00:24is that half of this activity is actually local Iranian citizens escaping the regime.
00:31And roughly half of that usage we think is tied to IRGC being able to buy weapons and conduct oil
00:39trade
00:39and now think about taxing ships going through the Strait of Hormuz.
00:45So we have some experts here at Bloomberg Intelligence, Joshant Shaharat, writing that stable coins are a vital safe haven
00:53in this Middle East conflict, providing U.S. dollar linked liquidity for Iran, but also for neighboring countries
01:01like Lebanon as well as Dubai. Is this problematic for the U.S. government?
01:07I think when it comes to the tools at the U.S.'s disposal, having the intelligence behind money movement
01:14of the Iranian regime is critical. What we need to focus on as a country is making sure that all
01:21of the economic flows,
01:23linked to the sustenance behind the regime is well understood. And to the extent that stable coins are being used,
01:29there are tools at the disposal to be able to conduct sanctions activity against some of these wallets.
01:36And the U.S. has been very active in that front. There's also opportunities to freeze and seize assets as
01:42they go
01:42beyond the Iranian borders and get integrated into the global cryptocurrency ecosystem.
01:47And so the visibility that we can create from chain analysis of showing what this economy looks like
01:54is actually critical to the intelligence picture that U.S. and allies need to have at this moment in time.
02:00What are some of those tools that the U.S. and its allies actually have?
02:04Because isn't the whole point of cryptocurrency that it does flow essentially permissionless across borders
02:10and easily for transactions that, you know, in with another type of currency would have to go through intermediaries?
02:19Yeah. So when it comes to stable coins, for example, there are multiple different ways that stable coins can be
02:25frozen,
02:27seized or even destroyed. And what we have seen actually in the case of Iran is we have seen one
02:32of the one of the large exchanges in Iran
02:34actually fall offline and have that cryptocurrency burn. And, you know, it's not attributed on exactly how that happened,
02:41but you can think of that as a potential policy option for the offensive cyber capabilities that the U.S.
02:49and allies have.
02:50There's also the ability to conduct freeze orders at exchanges that are the on-ramps and off-ramps of these
02:57stable coins.
02:58And the issuers themselves have freeze capabilities in the contracts to be able to freeze assets when they have fallen
03:06into the wrong hands.
03:07And, yeah, we've seen both Tether and Circle freeze large sums of stable coins in existence based on law enforcement
03:15orders.
03:16I think about Dubai and how it's worked really hard to become a global crypto capital in many ways,
03:22attracting capital, attracting investors, tech providers, institutions, and building out all this infrastructure.
03:28But it's also home to sanctioned Russian and Iranian transactions. I'm curious what you are seeing at your end.
03:35Yeah, what we have seen, and I think that this is a trend that is happening across global regulatory regimes,
03:42is that there are large amounts of businesses that are registering for licenses in different places,
03:48whether that's Dubai, whether that's Brazil, whether that's Canada or the U.K.
03:52And those agencies and regulatory authorities are now in a great position to actually make sure that those businesses that
04:01are registering
04:02are legitimate businesses and that they can monitor their activity and ensure compliance to global AML standards.
04:09And that's where we have actually seen there's been a big change where regulators now have to have, you know,
04:15the tools at their fingertips to be able to oversee the market and enforce that type of, you know, compliance
04:22with global standards.
04:23And that's going to actually help clean up the industry.
04:26And Dubai and Vara and ADGM have been at the forefront of establishing those standards.
04:31So how does that, how does AI come into that and intelligence agents,
04:36which increasingly Chainalysis is getting into, using these AI agents to help understand what's actually happening on these systems?
04:44Yeah, what we have seen is that the scale of transactions and the complexity, as we're talking about, of the
04:51types of global threats,
04:53you need to be able to automate a lot of the analysis that happens when it comes to blockchain intelligence.
05:00And Chainalysis agents are all about pairing large language models with deterministic code that executes on Chainalysis intelligence
05:11to give law enforcement the same types of insights, but just at machine scale.
05:16And so this is where I think that the future of blockchain intelligence is,
05:20is where our customers, our regulatory customers, our law enforcement customers,
05:25our national security agencies are able to build agents themselves on the Chainalysis platform
05:31to access insights at an unprecedented scale,
05:34to tackle these types of problems at the pace that our adversaries are moving.
05:39We'll see you in the next couple of minutes.
05:39We'll see you in the next couple of minutes.
05:39We'll see you in the next couple of minutes.
05:39We'll see you in the next couple of minutes.
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