The problem with Arkham Intelligence

There's a good chance that if you're in the crypto space, especially if you got in early, privacy and anonymity are key values that you agree with.

Yet, this week, these values are under threat- at least, that’s what crypto twitter will have you believe.

This week, Arkham Intelligence, a data analytics platform which offers bounties for providing evidence linking wallets and addresses to public figures, paid out a bounty for evidence related to the wallet of Terra co-founder Do Kwon.

The platform, founded in order to deanonymise blockchains, has drawn criticism from the crypto community for being a way to snitch on each other, and the platform has also had accusations of government involvement thrown at it.

Certainly, for an industry that often waxes eloquent about the need for privacy and anonymity, Arkham Intelligence's emergence and to some extent its existence is a bit strange. Its philosophy stands in stark contrast to the rest of the industry, and the irony of such a company existing in the industry has not been lost on many people in the crypto space.

The darker side of blockchain intelligence

But what does Arkham Intelligence actually do, and is it really as bad as people make it out to be?

First of all, Arkham Intelligence is a blockchain intelligence firm. But what makes it controversial is the new exchange that it is setting up, that would allow for users to put up requests for information in exchange for a bounty, and for other users to carry out investigations in order to obtain such information to exchange for the bounties.

Thus far, bounties have been put up and claimed for identifying wallets owned by Elon Musk and Do Kwon.

These bounties have led some to term Arkham Intelligence as a ‘dox-to-earn platform’.

Indeed, when what is being exchanged publicly is information, and sometimes private information, it does seem that there may be a case to be made that Arkham Intelligence presents a serious threat to privacy.

The problem, however, is not the existence of the platform itself. Dealing in information, intelligence, and investigations is the bread and butter of many companies, including reputable ones like Chainalysis and Mandiant.

The difference, however, is the scope with which Arkham Intelligence allows for users to place bounties on information.

Cryptocurrency crime investigators have a specific scope- they investigate criminal activity and track wallets associated with criminals and criminal organisations.

In contrast, while Arkham Intelligence has guidelines on what data can be exchanged on the platform, such as disallowing trading of private or personal data, how seriously these guidelines are taken is an open question. After all, data relating to the personal wallets of prominent figures like Elon Musk and Do Kwon was just released.

What is needed is for some form of moderation for the platform to ensure that there are good reasons to look for whatever data that is requested. As such, while people may submit requests and bounties, these requests should also be subject to a review process to ensure that the requests are reasonable.

There may be very good reasons for looking for certain pieces of information or data- that is why blockchain intelligence and investigations companies exist. But not all information is requested for good reasons, and that is where the line should be drawn.

Finding out where criminals have squirrelled away user funds, or tracing where wanted criminals are is ultimately necessary for ensuring that consumers are protected and compensated when things go wrong. It is, in some sense, necessary to limit the right to privacy and anonymity in order to guarantee security- and this is why companies like Arkham Intelligence have a place in the ecosystem.

They can play an important part in providing greater transparency on blockchain ecosystems, and advance the goal of a trustless system where users do not have to rely on the word of charismatic founders that their assets are really where they say they are.

Ultimately, Arkham Intelligence is not necessarily a force for good or evil. It is a tool that can be used for both. In its worst excesses, it can be used to dox high profile individuals, or for malicious fear mongering. But it can also be used to further the goals of a crypto community that has long suffered from a lack of policing.

Will they allow petty vigilantism to be a part of their request pools? Or will they filter out nonsensical requests, and only allow for requests when there is a good reason to do so?

Which way the coin falls is really up to how Arkham Intelligence proceeds from here on out- and the future of blockchain technology may depend on it.