How are transactions tracked on the bitcoin network?

forklog.com

2 min

September 4, 2019

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In January 2018, Bitfury Group (one of the world's largest developers and providers of blockchain solutions) introduced the Crystal tool to financial institutions and law enforcement agencies, which was created specifically for conducting investigations related to bitcoin.

Crystal analyzes the information on the bitcoin blockchain, concentrating on given addresses and sets of transactions, and also goes beyond the network and collects data related to the request from all available sources: sites, thematic forums, etc.

The tool visualizes the movement of funds up to the final address and the withdrawal of crypto assets into fiat currency and sends the results to the client's mail. At the same time, if when tracking manually, you may encounter the problem of a large branching of the flow of funds, the result of Crystal's work is a list of specific addresses to which the money has reached, as well as the definition of all ways of their delivery.

The investigation may delve into the risk assessment of transactions and track suspicious transactions by BTC address, but the developers claim that ultimately, using a unique clustering algorithm, Crystal is able to reveal the real name of the coin holder.

In version 2.2 of Crystal, a few more features have been added for the convenience of investigators. For example, clients can set up notifications about activities at a specific address with the ability to add a list of addresses involved in the transaction to monitoring and visualization in one click, as well as track transactions performed between addresses using intermediaries.

As an example of Crystal's effectiveness, its creators cite the investigation into the WannaCry ransomware virus . In May 2017, in 4 days, he caused damage to his victims by almost $ 1 billion, the NHS of Great Britain, the largest telecom company in Spain Telefónica, the American logistics giant FedEx and users from 150 countries of the world suffered from it. Using their tool, the creators of Crystal tracked the movement of funds from the bitcoin wallets of the attackers in three hours (to the points of withdrawal through the Changelly and ShapeShift crypto exchanges) and determined who was behind the attacks.

Bitfury also investigated the hack in September 2018 of the Japanese Zaif bitcoin exchange , which lost $60 million in crypto assets, including 6,000 bitcoins, as a result of hackers' actions.

The researchers determined that part of the stolen funds was sent for withdrawal through the Binance cryptocurrency exchange, the other part was broken into small amounts and distributed to numerous addresses through mixers, game services and other crypto exchanges, and 30% remained at addresses previously not highlighted on the network, presumably owned by the burglar. After that, addresses registered to unknown persons were transferred to Crystal for further monitoring.

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