Cryptocurrencies have become a popular target for cyber thieves. Since cryptocurrency transactions cannot be reversed, criminals feel confident that after they have initiated a fraudulent transaction the stolen funds are secured. However, this is far from the case. Cryptocurrencies are based on a public blockchain. This means that the flow of illicit funds can be traced. The act of tracing illicit funds through the blockchain is known as a cryptocurrency investigation or sometimes shortened to a crypto investigation.
What Are the Steps in a Cryptocurrency Investigation?
A cryptocurrency investigation uses advanced techniques to follow the trail of illicit funds. During a cryptocurrency investigation, a certified cryptocurrency investigator will carefully look through the transactions posted to the blockchain. From there, the cryptocurrency investigator will work to discover what address contains the stolen funds.
After identifying an address, the next step in a crypto investigation is to try and unmask the owner of the address. Using a combination of Open-Source Intelligence (OSINT) and Know Your Customer (KYC) data collected by the exchanges, an investigator can work to identify the owner of a cryptocurrency address. From there, law enforcement can issue subpoenas and try to recover the funds.
Cryptocurrency investigations have been performed in many high-profile cases, including the Colonial Pipeline ransomware attack which caused gas shortages throughout the Southern United States. Colonial Pipeline decided to pay the ransom in Bitcoin. The FBI then began a crypto investigation to trace the ransomware payment. The cryptocurrency investigators determined that the funds were sent to a U.S. exchange. The FBI then issued a seizure and recovered the ransom.
Why Hire a Cryptocurrency Private Investigator?
There are many reasons individuals or companies may need to hire a cryptocurrency private investigator who is certified in the field and experienced using the same database platforms deployed by the U.S. Department of Justice.
- Individuals and the law firms that represent them may need the help of a certified cryptocurrency investigator to help trace stolen or hidden funds.
- Companies may need to initiate a cryptocurrency investigation if they believe financial crimes, such as embezzlement, were committed using cryptocurrency.
- Financial institutions and merchants who accept cryptocurrency may need the expertise of a cryptocurrency investigator to ensure they are maintaining cryptocurrency compliance.
- Government agencies and law enforcement departments may need a certified and highly trained crypto investigator to assist with investigations.
Finding an experienced crypto investigations company is critical to obtaining adequate cryptocurrency investigations services.
How ERMProtect Can Help
As cryptocurrencies continue to become more popular it is inevitable that crimes will be committed with them. Thankfully, with the help of cryptocurrency investigations, we can try to prevent criminals from profiting from these crimes. ERMProtect has several certified cryptocurrency investigators on staff who work alongside our cybersecurity, forensic accounting, and investigative professionals to combat crypto crime. To learn more, click here or contact us at (800) 259-9660.
About the Author
Collin is a Senior Cybersecurity Consultant at ERMProtect. He leads AI Consulting at ERMProtect, assisting clients with AI Risk Management, Governance & Implementation Strategy. He is a published author on using AI to detect malware and speaks regularly at national conferences on using AI risks and implementation strategies. He has developed two proprietary AI tools for ERMProtect, an AI model that classifies executable files and an AI model used to detect phishing emails. Collin earned a PhD in Computer Science at the University of Miami researching AI and blockchain. In addition to specializing in AI solutions, he has performed penetration testing, risk assessments, training, and compliance reviews in his six years at ERMProtect.