crypto adoption Law Enforcement

Bitfury launches solution to help law-enforcement agencies in investigating crimes committed using Bitcoin

Author – Anujit , Bangalore, India

San Francisco, California, USA-based Bitfury, the Bitcoin mining giant and blockchain transaction processing company, has launched a collection of tools called Crystal that will help the law-enforcement agencies in investigation of crimes committed using Bitcoin. A light version of Crystal has already been made available, while work on an enterprise-level solution is in progress.

Cryptocurrencies including Bitcoin provide a certain degree of anonymity to the users, the transactions are often untraced and unlinked. A key aspect of the technology is that it allows a user to have multiple addresses. An individual with criminal intention can conduct transactions using one or more of his multiple addresses, thus making it very hard to follow the money trail. This does act as a temptation for the criminals to conduct their shady transactions using cryptocurrencies. Bitcoin, the oldest of the lot, has also been used for such abuse, with criminal activities conducted using Bitcoin since almost its inception. Law enforcement agencies have faced difficulties in identifying the real identity of the people indulging in criminal activities, and conducting their financial transactions in lieu of those activities, using Bitcoin.

There exists technology to link a user’s multiple addresses together in the Bitcoin blockchain, and it is called “clustering”. This can be done analyzing the data available within the blockchain, however, this also needs to be validated using data off-the-chain. Using the two sets of data in disjointed manner increases the percentage of error in the analysis, resulting into low degree of confidence on the part of law enforcement agencies on the analysis results.

Crystal, the solution launched by Bitfury, is changing that. Crystal will utilize the transaction data set available in Bitcoin blockchain, as well as off-chain data set, to build the model. Off-chain data includes web, various forums and several other sources of data. Crystal will de-anonymize the transaction addresses, and use clustering technique to group together multiple addresses belonging to one individual. Since it uses both the data sets, the percentage of error in the analysis will be very less, making the analysis results far more useful to the law-enforcement agencies. Bitfury has actually been able to identify one sixth of the users of the Bitcoin blockchain. It took Bitfury two years to develop the solution.

Valery Vavilov, the CEO of Bitfury group, believes that the new Crystal tool will make it much easier to identify and track criminal activities on the Bitcoin blockchain, by enabling the investigators to follow the money-trail. Bitfury had earlier made headlines when they launched their enterprise-grade blockchain framework, Exonum, which allows companies, institutions and governments to build their own cryptocurrency, store digitized assets, or code smart contracts. The other companies offering users a way to investigate Bitcoin blockchain are Elliptic, Chainalysis, and Skry. Light version of Crystal is available to individual users for free, and Bitfury will release pricing for enterprise subscriptions in March 2018.

 

Author: Author : Mike

A avid crypto expert. Freelancer, editor and manage part time content at cryptonewsbytes.com. Working at cryptonewsbytes.com since Dec 2017.

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A avid crypto expert. Freelancer, editor and manage part time content at cryptonewsbytes.com. Working at cryptonewsbytes.com since Dec 2017.
A avid crypto expert. Freelancer, editor and manage part time content at cryptonewsbytes.com. Working at cryptonewsbytes.com since Dec 2017.

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