Cyber criminals have developed and are actively trading a darknet blockchain analytics tool that could help a gang launder illegally acquired bitcoins, according to cryptocurrency analytics firm Elliptic.
“A blockchain analysis tool has been introduced on the dark web that makes it possible to check bitcoin addresses for links to criminal activity. The so-called antinalysis enables crypto launderers to test whether their funds are identified as proceeds from criminal offenses through regulated stock exchanges ” says Tom Robinson, co-founder and chief scientist at Elliptic. Robinson says cyber criminals have put in place a technique used by cryptocurrency exchanges to screen customer deposits for links to illegal activity.
“By tracking a transaction on the blockchain, these tools can tell if the funds are from a wallet that is linked to ransomware or some other criminal activity,” he says. “As a result, money launderers run the risk of being identified as a criminal and reported to the police every time they use this tool to send money to a company.”
While the process used by Antinalysis mirrors that used by legitimate tools, Robinson says the results are not favorable. “Elliptic’s own analysis of the results returned for a variety of Bitcoin addresses shows that it was bad at making connections to identify the major darknet markets and others criminal entities ”he says.
Antinalysis
The tool was developed by one of the developers of Incognito Market, a darknet market that specializes in the sale of narcotics, According to Robinson Incognito was launched in late 2020 and the market accepts payments in both Bitcoin and Monero. “The anti-analytics likely reflect the difficulties the market and its vendors are facing in collecting their Bitcoin revenue,” he says .
Elliptic’s investigation found that a cybercriminal can use the anti-analytics tool, similar to the one that Elliptic uses to track criminal proceeds, essentially to see what authorities would see in a blockchain transaction, the company says. “Antinalysis is trying to help crypto launders … by giving them a preview of what a blockchain analysis tool will do with their Bitcoin wallet and the funds in it,” says Robinson. “The website runs on Tor, an anonymous version of the Web that is widely used to host darknet marketplaces and other illegal services.”
The Business Model
It costs $ 3 to use the anti-analytics tool to check a single Bitcoin address. For this fee, the user receives a color-coded breakdown of where the software suspects the origin of the bitcoins and the risk associated with the transaction.
To demonstrate the value of their tool to potential customers, the Antinalysis team compares the results it generates with those of similar commercially available tools. Robinson says this comparison shows that anti-analysis is not good at its job. “This is perhaps not surprising: Providing accurate blockchain analysis requires significant investments in technology and data collection over long periods of time, ”he says.
However, Robinson points out that antinalysis is a leap forward for criminals as it allows them, at least at some level, to test their washing methods before risking depositing with an exchange or other service provider. “It is also important because it is the first time that it makes blockchain analysis available to the public,” says Robinson.
Blockchain analytics technology and capability had been limited to use by regulated financial service providers. Now, however, individuals or companies concerned about receiving proceeds that may have been the result of a crime potentially have the ability to prescreen addresses before taking payment in bitcoin, Robinson says.
Laundering Ill-Gotten Gains
The need for a cyber gang to launder cryptocurrency was highlighted this week when hackers returned $ 600 million stolen from the Poly Network cryptocurrency platform. Poly Network called on fellow crypto exchanges to blacklist tokens coming from the hacker’s addresses and asked the attackers to return the money.
