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The rise in popularity of cryptocurrencies represents a serious criminal threat. Criminals have used crypto to obfuscate their activities and continue to do so. Due to the complex nature of cryptocurrencies as well as the mode in which they are traded, investigations can be time-consuming, confusing, and potentially obstructed. Blockchain Investigation Agency expertise in cryptocurrency investigations and forensics will help you close cases.
What is blockchain?
A blockchain is “a distributed database that maintains a continuously growing list of ordered records, called blocks.” These blocks “are linked using cryptography. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. A blockchain is a decentralized, distributed, and public digital ledger that is used to record transactions across many computers so that the record cannot be altered retroactively without the alteration of all subsequent blocks and the consensus of the network.”
While blockchain is still largely confined to use in recording and storing transactions for cryptocurrencies such as Bitcoin, proponents of blockchain technology are developing and testing other uses for blockchain, including these:
Blockchain for payment processing and money transfers. Transactions processed over a blockchain could be settled within a matter of seconds and reduce (or eliminate) banking transfer fees.
Blockchain for monitoring of supply chains. Using blockchain, businesses could pinpoint inefficiencies within their supply chains quickly, as well as locate items in real-time, and see how products perform from a quality-control perspective as they travel from manufacturers to retailers.
Blockchain for digital IDs. Microsoft is experimenting with blockchain technology to help people control their digital identities, while also giving users control over who accesses that data.
Blockchain for data sharing. Blockchain could act as an intermediary to securely store and move enterprise data among industries.
Blockchain for copyright and royalties protection. Blockchain could be used to create a decentralized database that ensures artists maintain their music rights and provides transparent and real-time royalty distributions to musicians. Blockchain could also do the same for open-source developers.
Blockchain for the Internet of Things network management. Blockchain could become a regulator of IoT networks to “identify devices connected to a wireless network, monitor the activity of those devices, and determine how trustworthy those devices are” and to “automatically assess the trustworthiness of new devices being added to the network, such as cars and smartphones.”
Blockchain for healthcare. Blockchain could also play an important role in healthcare: “Healthcare payers and providers are using blockchain to manage clinical trial data and electronic medical records while maintaining regulatory compliance.”
What are the business benefits of blockchain?
The primary benefit of blockchain is as a database for recording transactions, but its benefits extend far beyond those of a traditional database. Most notably, it removes the possibility of tampering by a malicious actor, as well as provides these business benefits:
Time savings. Blockchain slashes transaction times from days to minutes. Transaction settlement is faster because it doesn’t require verification by a central authority.
Cost savings. Transactions need less oversight. Participants can exchange items of value directly. Blockchain eliminates duplication of effort because participants have access to a shared ledger.
Tighter security. Blockchain’s security features protect against tampering, fraud, and cybercrime.
What are the disadvantages of blockchain?
Some of the reasons that there is some hesitation towards blockchain, is as blockchains use excessive energy. Another is that it is not a hugely distributed computing system. There is also the fact that mining does not offer network security, and blockchain entries are not forever lasting and are not immutable. One of the notable weaknesses of blockchain is scalability, while blockchain is not indestructible. The anonymous and open nature of blockchains is not an asset, and proof of work is overkill. Lastly, blockchain can lead to complexity, and it can also be horribly inefficient.
Cryptocurrency Forensics and Fraud Investigation
Online frauds, cybercrimes, and cryptocurrency schemes may involve fictitious personas and stolen identities, controlled by individuals – or criminal organizations – in multiple countries. Perpetrators may attempt to obfuscate the flow of their funds across the blockchain through peel chains and layering or launder illicit proceeds through darknet markets and high-risk exchanges.
However, Bitcoin and other crypto coins and tokens are not completely anonymous. Cryptocurrency transactions can be traced by investigators to identify perpetrators and determine the location of misappropriated funds.
Cryptocurrency forensics and asset tracing are critical parts of the cryptocurrency fraud investigation process. It is conducted in support of civil litigation, criminal complaints, and regulatory enforcement actions.
What Are the Steps in a Cryptocurrency Investigation?
A cryptocurrency investigation uses advanced techniques to follow the trail of illicit funds. During a cryptocurrency investigation, a certified cryptocurrency investigator will carefully look through the transactions posted to the blockchain. From there, the cryptocurrency investigator will work to discover what address contains the stolen funds.
After identifying an address, the next step in a crypto investigation is to try and unmask the owner of the address. Using a combination of Open-Source Intelligence (OSINT) and Know Your Customer (KYC) data collected by the exchanges, an investigator can work to identify the owner of a cryptocurrency address. From there, law enforcement can issue subpoenas and try to recover the funds.
Why Should You Hire a Cryptocurrency Private Investigator?
There are many reasons why individuals or companies may need to hire a cryptocurrency private investigator who is certified in the field and experienced.
Companies may need to initiate a cryptocurrency investigation if they believe financial crimes, such as embezzlement, were committed using cryptocurrency.
Financial institutions and merchants who accept cryptocurrency may need the expertise of a cryptocurrency investigator to ensure they are maintaining cryptocurrency compliance.
Government agencies and law enforcement departments may need a certified and highly trained crypto investigator to assist with investigations.
Finding an experienced crypto investigation agency is critical to obtaining adequate cryptocurrency investigation services.
If you are a victim of cybercrime, contact us by filling out the online contact form on our website or by calling the number +41 44 586 60 33
Blockchain Investigation Agency
Tel. +41 44 586 60 33
Schaffhauserstrasse 550.
CH-8050 Zürich
Switzerland
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