Blockchain analysis source:

Blockchain analysis is the process of inspecting, identifying, clustering, modeling and visually representing data on a cryptographic distributed-ledger known as a blockchain. The goal of blockchain analysis is discovering useful information about the different actors transacting in cryptocurrency. Analysis of public blockchains such as the bitcoin and ethereum is often conducted by private companies [1][2][3][4] Bitcoin has long been associated with the trade of illegal goods on the dark web; this has been the case since bitcoin became the standard currency on the now closed Silk Road.[5][6]

Cryptocurrency exchanges[edit]

Crypto currency exchanges are increasingly required by law to address the source of funds for crypto traders. Singapore, Japan, the USA are examples of countries that have passed laws that now require the exchanges to track the source of the crypto funds.[7][8]


Data in most blockchains are public meaning that anyone can harness the addresses. By using common-spend clustering algorithms, it is possible to map the spendings of certain entities on the blockchain. This is how criminals have been caught moving illicit funds using various cryptocurrencies.[9][10]


Blockchain analysis has played a role in several high interest cases. In 2018 an analysis of bitcoin transactions uncovered that there was a link between major cryptocurrency exchange BTC-e and Fancy Bear.[11] In 2019, a major website hosting child sexual abuse material was taken down by law enforcement who used block chain analysis techniques. [12]


  1. ^ Malik, Nikita. "How Criminals And Terrorists Use Cryptocurrency: And How To Stop It". Forbes. Retrieved 2019-05-28.
  2. ^, Chainalysis Inc. "Chainalysis - Blockchain analysis". Chainalysis. Retrieved 2019-05-28.
  3. ^ John (2018-04-20). "About Us". CipherTrace. Retrieved 2019-05-28.
  4. ^ Elliptic. "Elliptic | Preventing and detecting criminal activity in cryptocurrencies". Retrieved 2019-05-28.
  5. ^ Bradbury, Danny. "Silk Road and Beyond: Bitcoin's Complex Relationship With the Dark Web". The Balance. Retrieved 2019-05-28.
  6. ^ Arts and Humanities, Research Institute for (December 2013). "GDPO Situation Analysis Silk Road and Bitcoin" (PDF). GDPO.
  7. ^ Staff, Global Legal Research Directorate (June 2018). "Regulation of Cryptocurrency Around the World". Retrieved 2019-05-28.
  8. ^ PricewaterhouseCoopers. "Carving up crypto: Regulators begin to find their footing". PwC. Retrieved 2019-05-28.
  9. ^ Bloomberg, Jason. "Using Bitcoin Or Other Cryptocurrency To Commit Crimes? Law Enforcement Is Onto You". Forbes. Retrieved 2019-05-29.
  10. ^ Yakowicz, Will (2018-01-09). "Startups Helping the FBI Catch Bitcoin Criminals". Retrieved 2019-05-29.
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