Saturday, May 30, 2020

Blockchain Forensic: Bitcoin is the Major Cryptocurrency Used by Criminals for Illegal Activities

Criminals love using Bitcoin more than any other cryptocurrency in their illegal activities. While that may scream high adoption rate, it’s obviously not a good thing. Chainanalyis, a blockchain analysis firm has reported that Bitcoin accounts for 95 percent of cases investigated by law enforcement, according to media’s report on April 25.

Criminals’ Choice of Bitcoin Over Other Assets

Per the report, Chainanalyis revealed that Bitcoin has outdone other cryptocurrencies on the market when it comes to the competition as to which is mostly used to facilitate crimes. There may be over 2,000 crypto assets on the market, but there is really no strong contender with the virtual asset.

Bitcoin’s popularity among villains does not come as a surprise since it is the most popular cryptocurrency based on its $93 billion market cap today. It is traded on several exchanges and accepted by a number of companies. As such, it makes it easy to be traded and spent which has made it the ideal currency for illegal activities.

Chainanalysis Uses Software to Aid in the Traceability of Transactions

Chainanalysis, on the other hand, has been using its software to enable cryptocurrency firms as well as law agencies to trace transactions on the blockchain. It may be difficult on a normal day to ascertain who made such transactions, but the company links a person’s identity to their crypto asset. It currently tracks transactions on 10 different blockchains and some assets alongside Bitcoin which it traces include USD Coin, Gemini Dollar, Tether, and Binance coin.

Jonathan Levin, co-founder and COO of Chainalysis while speaking to the media said Blockchain forensics analysis has aided with a good number of opioid bursts in the U.S. It has enabled authorities like the U.S. Drug Enforcement Agency to track illegal purchases made with cryptocurrency for fentanyl and other drugs.

Levin also said:

What we’ve seen is that there is the ability to tie some of those cryptocurrency transactions either to the pharmacies in China or to the services that people are using to distribute fentanyl.

Blockchain Analysis of Quadriga’s Wallet

Chainanalysis may have been able to track these trades, but the same cannot be said when it came to the QuadrigaCX saga. The latter is a Canadian based cryptocurrency exchange which claimed it had lost the private key to cold store wallets where $190 million of customer crypto is stored. Nonetheless, Chainanalysis after its research revealed that there was never any funds in such wallets.

In a similar event, BTCNN has made several crime-related reports where Bitcoin was the major asset used. Two Nigerians, for instance, were recently indicted for scamming three investors about 50 Bitcoins in an online scam. On April 24, BTCNN informed that two Indian law enforcement agents were apprehended for receiving a bribe of $1 million in Bitcoin

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