Chainalysis, a blockchain tracking firm whose client base includes government investigators, crypto exchanges and even financial institutions, raised $100 million in a round that underscores surging demand for cryptocurrency compliance infrastructure.

The Series D raise values the New York firm at $2 billion and was led by Paradigm with participation by Addition Capital, Ribbit and Marc Benioff’s Time Ventures. It comes after November’s $100 million Series C at a $1 billion valuation. In six years Chainalysis has raised $266 million in total.   

Chainalysis is among the largest U.S. cryptocurrency investigation firms building software to untangle messy blockchain transaction histories. Crypto transfer records are publicly available but difficult for laypersons to decipher without context, such as flagged wallet addresses and blacklisted coins.

That has turned into a multimillion-dollar business opportunity for Chainalysis. Government agencies use its products to bust bitcoin-linked crime rings while exchanges turn to it for help vetting and sometimes freezing stolen crypto. U.S. agencies are a particular cash cow: the FBI, Internal Revenue Service (IRS), Department of Homeland Security (DHS) and other federal offices spent over $10 million on Chainalysis in 2020, according to records reviewed by CoinDesk.

But the company is also pursuing international deals, especially in Asia, where CEO Michael Gronager plans to resurrect a pre-pandemic expansion playbook by investing in its Tokyo and Singapore outposts. Those offices, which opened amid COVID uncertainty, have so far been stymied by hiring woes, Gronager said.

A growing global rolodex spans government agencies in 30 countries and companies in 60, Chainalsysis said. It said its annual recurring revenue has more than doubled year over year, fueled in large part by a blistering six months of growth that coincided with bitcoin’s price boom.

Gronager said private-sector tie-ups continue to be a major source of new partnerships for Chainalysis while its government business, though “super solid,” remains stable. Financial institutions are also beginning to show interest, he hinted.

Onboarding new clients is an expensive proposition, Gronager said, and so the money will go toward building out that function.

“We are an enterprise sales company,” he said. “Every time we need to book another $1 or $2 million [in contracts] we need to hire another sales rep.”