Bitcoin Is Not Anonymous: How Chainalysis, Elliptic and CipherTrace Track You
Bitcoin is not anonymous and never was. Every payment ever made is published permanently - amounts, times and addresses, all readable by anyone with a laptop. What the ledger leaves out is names, and an entire industry exists to fill that one gap. Chainalysis, Elliptic, CipherTrace and TRM Labs sell the software that does it, mostly to exchanges, banks and government agencies.
Who these companies are
Elliptic started in London in 2013, Chainalysis in 2014, CipherTrace in 2015. The names shift around - CipherTrace was bought by Mastercard and wound down its main products in 2024 - but the product category has not changed. None of them decrypt anything. They are, in effect, publishers of a very good index to a book everyone already owns.
The three moves they all make
- Group. Addresses that spend together must share an owner, and the change from a payment comes back to an address you control. Follow that far enough and hundreds of addresses collapse into one wallet.
- Label. Analysts send tiny test payments to exchanges to learn which addresses belong to which company, then tag the clusters: this one is a Binance deposit system, that one a mining pool.
- Score. Each wallet gets a risk rating based on what it has touched. That score is why an exchange sometimes freezes a deposit and asks where the coins came from.
Where the trail actually ends
At a regulated business. An exchange that checked your identity holds the name, the documents and the bank account behind an address, and it answers legal requests. Coins that never touch such a company are far harder to attribute - but the ledger is permanent, so a wallet can sit untouched for years and still be followed the moment it moves. That is how the bitcoin stolen from the Bitfinex exchange in 2016 was traced and seized in 2022.
What to do with this: assume any address you use is as public as a phone number, keep your own records of dates and amounts so an exchange query is boring rather than alarming, and use a fresh receiving address each time. More in de-anonymizing Bitcoin and what Chainalysis is.