On the 30th of January, Bitfury Group launched Crystal, a blockchain investigative tool for law enforcement organizations and financial institutions.According to their press release, the tool’s purpose is to track suspicious bitcoin transactions to real-world entities and individuals. The tool is useful for law enforcement to decode complex relationships and financial institutions engaging in compliance and due diligence.Crystal’s advanced analytics and data scraping features provide a comprehensive view of the bitcoin blockchain. They make it easier to identify, track, and capture criminals who undergo illegal activities through the network.“Public blockchains have the potential to fundamentally improve our day-to-day lives and be strong forces for social good,” said Valery Vavilov, CEO of the Bitfury Group. “Unfortunately, there are people who exploit public blockchains and take advantage of their pseudonymity to commit crimes. With Crystal, we are taking a critical step toward ensuring that the Bitcoin blockchain and other public blockchains have a safe and secure future.”
A new study published on the 24th of January 2018, by the University of Sydney, University of Technology Sydney, and the Stockholm School of Economics, found that 25 percent of Bitcoin users used the Bitcoin blockchain for illegal activity.The research paper stated that, “by providing an anonymous, digital method of payment, Bitcoin did for darknet marketplaces what PayPal did for [eBay] - provide a reliable, scalable, and convenient payment mechanism.”According to the study, there are currently 24 million illicit users on the Bitcoin blockchain; with 36 million illicit transactions occurring every year. Approximately 20 percent of the dollar value of all transactions in the network are illegal, amounting to $72 billion USD ($89.2 billion CAD) per year. The study also found that 51 percent of all Bitcoin holdings throughout Bitcoin history have been illegal.
Crystal’s purpose is to help Bitcoin move past any association with the black market.
“As with any disruptive technology, many of the initial use cases revolve around illicit activities,” said Lucas Nuzzi, a senior analyst at Digital Asset Research, in an email to Bloomberg.With almost half of all Bitcoin transactions linked to illegal activity, it’s not surprising to see large federal agencies like the US Immigration and Customs Enforcement (ICE) and the FBI, recognizing the link between the Bitcoin blockchain and criminal activities.
In the first Blockchain Summit in 2014, “the Blockchain Alliance…[explored] how private companies could join in the public fight against criminal activity,” said Jamie Smith, Bitfury’s global chief communications officer.Bitfurty developed the investigative tool to help Bitcoin move forward from its black market reputation. It was developed over a two year period and received continuous feedback from former senior government officials.To ensure effective blockchain investigations, Bitfury created multiple features within Crystal. For instance, Crystal collects data concerning Bitcoin addresses from multiple sources such as web forums and other websites. With this approach, Crystal can identify the real world name from an entity’s address and the information available online.Although tracking tools exist today, Crystal’s autonomous tracking feature is a significant time saver. After a few hours of research, the autonomous tracking feature sends an email indicating a final destination address. Authorities can, therefore, reduce their time spent on manually tracing suspicious transactions.Despite Crystal’s complex features, Bitfury understood the importance of a simple interface. An easy to navigate interface can remove the complexity from the process, allowing faster and more efficient tracking of transactions.
Although Bitfury was originally a Bitcoin mining company, they’ve expanded to become a full-service blockchain technology provider. Bitfury recognized the need for an enterprise tool to fight against criminal activity through the Bitcoin blockchain. “Criminals are increasingly learning the Bitcoin Blockchain is not the place for them,” said Jason Weinstein, a Bitfury strategic advisor and former Deputy Assistant Attorney General at the US Department of Justice. “Having a traceable public ledger of every bitcoin transaction ever conducted allows law enforcement to ‘follow the money’ in a way that would never be possible with cash.”“Criminals should run, not walk, away from bitcoin,” he continued. “And thanks to Bitfury, today they should be running away even faster.”Image credit: Bitfury logo
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