Despite being only a little more than a decade old, blockchain has pretty much bred a technological revolution — one that could refashion processes in finance, medical administration, supply chains, education, and well… virtually most areas that one can think of. As messy as it sounds, the core concept of blockchain is actually quite simple: it is essentially a collection of records (‘block’) linked together (‘chain’), with its information decentralized, non-alterable, and protected with cryptography. Blockchain is the mother of the 6000 + cryptocurrencies that exist today and of course, this includes the famous (or rather, some say infamous) Bitcoin.
There is overwhelming concern that this very design makes blockchain the perfect creation for criminals. This is mainly because the use of cryptocurrencies has made it easy to secure clandestine transactions without having to go through a centralized bank. Such anonymity has introduced challenges for law enforcements to track culprits of crimes such as theft, scamming, money laundering, and terrorism, as well as sex and labour trafficking. From January to May 2020, financial losses from cryptocurrency-related thefts seem to have peaked and reached a whopping amount of $1.4 billion.
But things aren’t all that hopeless, as data analysts are on a mission to investigate how blockchain itself could indeed be the very same tool used to tackle the crimes it lends a platform to. In 2017, computer scientist Rebecca Portnoff and her colleagues explained how cryptocurrency can help us follow the breadcrumbs of sex traffickers. The team developed a machine learning classifier that takes advantage of stylometry — the study of writing style via quantitative processing — to first distinguish between independent sex service providers and potential sex traffickers on online sex advertisements. From there, computational linking techniques make use of leakages in the cryptocurrency ‘mempool’ (a space that holds pending cryptocurrency transactions) to link back to those potential traffickers. This promising technology may, however, see some limitations beyond its control, such as the inherent limits of stylometry (or rather, forensic linguistics in general).
More recently, thanks to a process coined as ‘cluttering’, companies that serve to tackle crypto crime now have the possibility to identify accounts under the same Bitcoin wallet and entity (after all, Bitcoin as a cryptocurrency is a public record of transactions and not entirely untraceable). Companies such as Bitfury’s Crystal engage with the detection of potential illicit activity, recently assisting the Ukrainian Ministry of Digital Transformation in achieving this goal. In a similar vein, the Bitcoin Intelligence Group (BIG) has partnered with the Anti Human-Trafficking Intelligence Initiative (ATII) to track down human traffickers, mainly by updating its data of crypto transactions as well as addresses suspected to be relevant to human trafficking. CipherTrace, claimed to be the world’s first Blockchain Forensics Team and a leader in blockchain security, has set out on similar missions with ATII.
Finally, there is the question of what happens with the involvement of biometrics — that is, biological measurements used to identify individuals (fingerprints, facial recognition etc., to name a couple). David Orme, the Senior Vice President of Sales and Marketing at IDEX Biometrics, invites contemplation on whether biometrics may impede crypto-crime. The claim stems from concerns over the fragility and potential insecurity of both ‘hot wallets’ (hard devices that can connect to the Internet, such as tablets and laptops) and ‘cold wallets’ (offline devices such as memory sticks that store crypto data). Although the ‘when biometrics-meets-blockchain’ issue has been brought to the table in areas like food logistics and aviation quality, discussions about biometrics in the specific area of cryptocurrency remain scarce and merit further examination.
With criminals diligently sharpening their tools and supporting their pernicious businesses with cryptocurrency, there is naturally a strong need for researchers to keep up and take action. At this juncture, we are tasked with a timely cultivation of professionals at the crossroads of data science, criminology, and cryptocurrency. In the face of a globally disruptive technology like blockchain, there is a pressing need for us to obstruct intentions of applying it as a platform for malicious businesses – albeit an incredible challenge.
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