There are several firms whose sole business line is tracking a crypto coin’s transaction path. The process largely contravenes the blockchain’s key selling point, transaction privacy, by giving details on a crypto’s movement and making profiling possible.
The blockchain space has always prided itself on high transaction privacy. The possibility of Peer-to-peer transactions without requiring a central authority or third party has ensured transacting parties maintain anonymity. Nevertheless, change has inevitably caught up with the cryptocurrency world. So How is it done, which firms do it and what are the outcomes of this tracking action?
The Crypto Tracking Process
Tracking of a cryptocurrency is better referred to as Crypto sleuthing. The aim here is not to be confused with crypto portfolio tracking, which is the tracing of the movements of crypto prices. Crypto sleuthing involves keeping track of the circulation of specific cryptocurrencies by maintaining records regarding them.
The process is highly dependent on algorithms, working in tandem with a good idea of the crypto’s entry and exit points. The algorithms serve as the Blockchain investigative software, which when pieced with other data can give a credible breakdown of crypto transactions.
Firms Involved in the Business
There are a growing number of firms involved in crypto sleuthing. Some have gone ahead and made huge collaborations with governments, increasing their net worth fast. They include;
Based in the US, Chainalysis aids anti-money laundering and Know Your Customer compliance firms with detailed reports on suspicious transactions. Their monitoring reports cover the sources and destinations of the crypto transactions in question as well as provide cybercrime analysis.
A notable case by the firm includes the tracing of 650,000 bitcoins stolen from the largest crypto exchange then, Mt. Gox. The firm also works with the US government on various crypto fraud-related cases.
London-based Elliptic is one of the first sleuthing firms. It is driven by the aim of making the crypto world hacker and cyber-attack free.
To achieve its goal, it provides sleuthing services to some of the largest crypto firms such as Coinbase, Binance, and Fireblocks. Its proof is packaged in a manner that’s conducive for audit by anti-money laundering authorities.
With five different cryptos in its tracking portfolio, Qlue is a vibrant crypto recovery platform that’s conducive for both private and public cases. It however provides tracking for cases worth over $5000 only.
The Israeli crypto sleuthing firm Whitestream has been piquing interest in a major way. Armed with some of the most advanced technology in the industry, the firm has been able to trace Hamas crypto donation requests as well as the fact that Nigeria is Africa’s main crypto scam source.
Crystal by Bitfury
Bitcoin’s leading security provider, Bitfury, has a sleuthing tool called Crystal. It is a very versatile and powerful tool, serving over 100 clients and monitoring up to 4000 transactions and addresses daily.
Crystal provides anti-money laundering services to private and banking clients, as well as compliance monitoring services to governments. It also enables its clients to operate within the confines of regulatory requirements in over 70 countries.
Based in the US state of California, CipherTrace is a leading sleuthing organization with clients in several sectors. Its clientele includes banks, Governments, crypto exchanges, and audit firms.
A bonus of this platform is its knowledge equipping initiative. It gives certified training to investigators, researchers, and auditors on sleuthing techniques and processes.
The analysis firm CipherBlade is a veritable crypto sleuthing company. It is reputed to have recovered millions of cryptocurrencies in cybercrime cases during its operations. The firm has also conducted some sleuthing investigations pro-bono where they amount to heinous crimes.
Luxembourg-based ScoreChain is an investigative firm with a keen interest in big data accountability. It provides sleuthing services to crypto custodians, wallets, exchanges, brokers, and ICO/STO companies. A key selling point of the firm is that no additional entry fee is charged, making costs quite predictable to its users.
Pros of Crypto Sleuthing
Crypto sleuthing has been seen quite positively by a host of observers. The reverse is also true, making it a double-edged sword. The benefits are as follows;
As a start, it has tamed losses from hacking and cybercrime. Perhaps its largest benefits, sleuthing has made it possible for the recovery of billions of dollars worth of stolen cryptos. A notable case is where $1.2 billion worth of Bitcoin was recovered thanks to the investigative efforts of one of the firms mentioned above.
Transaction tracking has also enabled governments and investigators to nab cybercrime perpetrators. The villains attracted to crypto’s anonymity transactions find no solace. Besides, the act has helped crypto players to operate within regulatory confines. This has reduced unwarranted conflict with authorities.
Also, the existence of sleuthing firms makes it possible for the coexistence of blockchains and governments by bringing some form of control. The fear of lack of control by governments was pushing them towards outright banning cryptos.
Cons of Crypto Sleuthing
Sleuthing is not without its critics, staunch ones at that. To begin with, the very act of crypto sleuthing is a big parallel to blockchain technology’s main driving point, anonymity. Blockchain enthusiasts see it as a key deviation from the blockchain concept.
Second, the fact that government control is possible via the enforcing of regulations via sleuthing firms beats the purpose of blockchain’s key motto. That is the lack of a central authority. There is also the possibility of targeted actions against several crypto firms or notable crypto individuals.
Sleuthing enables the tracing of transactions right to the source. Since crypto regulations are still a work in progress, a regulation may be formed with a bias against such individuals or institutions based on tracking results. Besides, there’s fear of cybercrime perpetrators taking advantage of the sleuthing process.
If they can develop sleuthing tools, they’ll be armed with the ability to track the largest transactions right to their source. Hackers could make crypto transactions very unsafe by exploiting the very same service meant to stop them
Crypto sleuthing is fast becoming a normal part of the blockchain world. Gone are the days when transactions were quite anonymous. Crypto sleuthing has made it possible for one’s privacy to be unearthed and monitored by a central authority.
The process has helped a lot in unearthing lost cryptos. Governments have also utilized these tools to track cybercrime syndicates. This has created a safer crypto world for users but within the confines of authorities, a win-win situation.
However, authorities may misuse this power if they wish to. There’s also the worrying possibility of cybercrime perpetrators using the same tool to be even more dangerous. Sleuthing may be as helpful as it is dangerous.