cryptocurrency tracing

Can Cryptocurrency be Traced?

Despite the mainstream belief that cryptocurrencies are entirely anonymous. Transactions for Bitcoin and other cryptocurrencies are publicly reported on the open-source blockchain ledgers that identify users solely by their cryptocurrency address – a long string of letters and numbers – without names, locations, or other personally identifying details.

Law enforcement agencies, regulators, and financial investigators have developed innovative methods to pierce that veil of anonymity. Blockchain intelligence tools and investigative techniques, including analysis of every day and address reuse, can be used under certain conditions to de-anonymize cryptocurrency transactions.

Commercial cryptocurrency exchanges, decentralised finance (DeFi) protocols and virtual asset service providers that comply with Know Your Customer (KYC) and Anti-Money Laundering (AML) regulations typically require verification of customer identity for new accounts. This makes them a precious resource for de-anonymizing subjects who have used their services to buy, trade, hold, or cash-out cryptocurrency. Personally, identifying information for registered owners of addresses and wallets – as well as their banking details – may be obtainable through civil subpoenas or criminal warrants. Our reports will form a basis for such requests.

Furthermore, our state-of-the-art analysis tools calculate risk scores for transactions based on whether the funds have been tainted by travelling through suspicious paths or being associated with known bad actors or geographies.

The analysis engine we utilise can trace large address sets and then assign risk scores to suspicious transactions or patterns of transactions. The bulk upload and analysis of transactions and addresses speed up complex investigations and audits. It also delivers the ability to load past transactions to comply with requests from Financial Crime Enforcement Network (FinCEN).

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