How Chainalysis Enhances Crypto Investigations with Advanced Tools

In
the
rapidly
evolving
world
of
cryptocurrency,
law
enforcement
faces
new
challenges
in
tracking
and
seizing
illicit
assets.
Chainalysis,
a
leader
in
blockchain
analysis,
has
been
at
the
forefront
of
supporting
crypto
investigations,
providing
tools
that
help
authorities
uncover
valuable
leads,
build
compelling
cases,
and
seize
illegal
assets,
according
to

Chainalysis.

Discovering
Leads
and
Building
Cases

In
recent
years,
the
prevalence
of
crypto-related
crimes
has
surged,
with
romance
scams
alone
doubling
in
revenue
in
2023.
These
scams,
often
referred
to
as
“pig
butchering
scams,”
involve
scammers
developing
relationships
with
victims
to
extract
significant
financial
investments
in
fake
opportunities.
Chainalysis’
tools
start
at
the
discovery
phase,
allowing
law
enforcement
to
gather
initial
reports
of
illicit
activity.

One
such
tool,
Rapid
Lookup,
enables
officers
to
quickly
assess
and
verify
crypto
addresses
provided
by
victims.
By
entering
a
crypto
address,
officers
can
uncover
associated
on-chain
activity,
categorizing
addresses
as
scams
and
corroborating
victim
testimonies.
This
information
is
then
escalated
to
internal
investigators
for
a
deeper
review.

Analyzing
Crypto
Activity

Once
initial
information
is
gathered,
investigators
analyze
the
transactions
using
Chainalysis’
tools.
For
instance,
the
Transaction
Explorer
simplifies
the
analysis
of
complex
transactions,
including
those
involving
cross-chain
bridges.
This
tool
provides
clear
interpretations
of
over
180
million
bridge
transactions,
helping
investigators
trace
funds
across
different
blockchains.

In
a
hypothetical
case,
an
investigator
might
find
that
funds
were
transferred
from
the
suspect
to
a
bridging
infrastructure,
such
as
Socket.tech,
and
then
moved
through
various
protocols.
By
using
Transaction
Explorer,
the
investigator
can
follow
these
funds
and
identify
their
final
destinations.

Enhancing
Team
Collaboration

Chainalysis
also
offers
Case
Workspace,
which
facilitates
team
collaboration
by
allowing
investigators
to
organize,
share,
and
collaborate
on
cases.
Teams
can
share
data,
graphs,
and
alerts,
and
assign
case
details
to
streamline
their
efforts.
This
collaborative
approach
ensures
that
all
members
have
access
to
the
latest
information
and
can
work
together
efficiently.

Innovations
from
Chainalysis
Labs

To
stay
ahead
of
increasingly
sophisticated
criminals,
Chainalysis
Labs
serves
as
an
R&D
hub,
offering
customers
the
chance
to
preview
cutting-edge
blockchain
intelligence
tools.
One
such
innovation
is
the
Bitcoin
Transaction
Search,
which
helps
investigators
locate
specific
transactions
based
on
parameters
like
time,
date,
and
amount.
This
feature
is
particularly
useful
for
manual
demixing
workflows,
enabling
investigators
to
trace
funds
through
complex
money
laundering
techniques.

Another
advanced
tool
is
Wallet
Scan,
which
allows
investigators
to
quickly
check
a
seed
phrase
for
all
associated
wallet
activity.
This
tool
operates
securely
offline,
maintaining
the
chain
of
custody
and
providing
visibility
to
millions
of
addresses
across
multiple
blockchains.

Pursuing
Criminals
and
Safeguarding
Communities

In
the
final
phase
of
an
investigation,
Chainalysis’
tools
help
authorities
pursue
criminals
and
prevent
further
illicit
activity.
Using
the
Service
Provider
Inquiry,
investigators
can
request
KYC
information
from
exchanges
and
freeze
funds
before
they
can
be
moved.
This
tool
streamlines
communication
with
Virtual
Asset
Service
Providers,
aiding
in
the
swift
seizure
of
illicit
assets.

In
a
practical
example,
Wallet
Scan
revealed
$790K
worth
of
illicit
funds
tied
to
a
seed
phrase,
leading
to
the
arrest
of
a
suspect
and
restitution
for
the
victim.

Overall,
Chainalysis
provides
a
holistic
solution
for
tackling
crypto-enabled
crime,
from
discovering
leads
to
seizing
assets.
With
its
advanced
tools
and
continuous
innovation,
Chainalysis
enhances
the
capabilities
of
government
agencies
and
investigators,
helping
them
navigate
the
complexities
of
blockchain
and
cryptocurrency
investigations.

Image
source:
Shutterstock