Chainalysis has unveiled Sentinel, an ecosystem monitoring solution designed to enable crypto token issuers with tools to manage compliance risks and support / participate in safer, more transparent markets.
As stablecoins and tokenized assets become more widely adopted, Sentinel arrives at an important juncture, addressing the need for ensuring regulatory compliance and risk mitigation in the crypto ecosystem.
Stablecoins have emerged as a major part of the cryptocurrency market, facilitating over 80% of transactions and serving as a vital bridge between traditional financial systems and decentralized finance.
Industry participants like Tether and Circle, with significant U.S. Treasury holdings, exemplify the scale and influence of stablecoins. However, their prominence comes with heightened scrutiny.
Stablecoins are increasingly implicated in illicit transactions, accounting for a substantial share of illegal activity, according to Chainalysis’ 2025 Crypto Crime Report.
This underscores the urgency for issuers to adopt compliance strategies to protect users and maintain market integrity.
The global regulatory landscape is also shifting.
Governments worldwide, from Japan to the United Arab Emirates and the European Union, are advancing legislation to regulate stablecoins.
The EU’s Markets in Crypto-Assets (MiCA) framework, for instance, has already granted key issuance approvals, setting a precedent for compliance standards.
In the U.S., discussions around stablecoin legislation are gaining momentum, with potential frameworks expected to take shape soon.
These developments signal a clear message: token issuers must prioritize compliance to navigate a regulated environment.
Sentinel is Chainalysis’ response to this call, offering a solution to meet these challenges.
Sentinel equips token issuers with a suite of features to monitor and manage their ecosystems effectively.
Real-time alerts for illicit activities enable issuers to respond to potential threats, while automated freezing of suspicious addresses helps mitigate risks before they escalate.
By integrating with Chainalysis’ Know Your Transaction (KYT) platform, Sentinel provides a compliance strategy that covers both primary issuance and redemption as well as secondary market activity.
This approach ensures issuers can assess risks at the transaction level and gain a macro-level understanding of their token’s ecosystem, identifying trends and actors that may pose compliance challenges.
The timing of Sentinel’s launch is significant.
As tokenized assets, including stablecoins and real-world asset (RWA) tokens like those built on Ethereum’s ERC-3643 standard, proliferate across industries such as finance, real estate, and gaming, issuers face mounting pressure to ensure compliance.
Sentinel’s ability to analyze risk exposure across more than 35 categories makes it a useful tool for issuers of all sizes, from startups launching their first stablecoin to established players managing billion-dollar market caps.
As noted in a blog post, Chainalysis brings its expertise to Sentinel.
Its blockchain intelligence dataset and partnerships with token issuers, regulators, and law enforcement agencies worldwide position Sentinel as a solution for enabling trust and safety in cryptocurrency markets.
By offering real-time insights and automated compliance tools, Sentinel enables issuers to become aware of illicit activity and align with global regulatory standards, ensuring a secure and compliant environment for tokenized assets.