Blockchain sleuths are individuals or groups who specialize in analyzing blockchain-based transactions to uncover any hidden information, track illicit activities, and ensure its security and transparency. The work of these good samaritans is critical in maintaining the integrity of any cryptocurrency ecosystem, where anonymity can often obscure the free flow of information and assets.
To put it simply, a blockchain sleuth is often times known as a crypto detective, who uses a mix of on-chain and off-chain tools to solve cybercrimes related to cryptocurrencies. Their work involves analyzing transaction details and tying the perpetrators to their real-life identities. Oftentimes, they cooperate with law enforcement to make sure the victims are served justice.
As blockchain use cases continue to grow, so does the scope for crypto scams. If it not a rug pull event, then scammers are busy planning fake token airdrops with pump-and-dump mechanics. These bad actors are constantly looking for a chance to steal your assets using social engineering and phishing tactics.
Let’s look how our heroes stop criminals in their tracks.
1. On-Chain Analysis
Blockchain sleuths utilize a variety of tools and techniques to track the flow digital assets across different crypto wallets and exchanges. This involves examining transaction histories recorded on the blockchain, which are immutable and publicly accessible.
Blockchain explorers are one such tool that allows the slueths to see the details of any transaction in a given network’s history. They can track the amount of funds transferred, who they were sent to and when, and trace activities on individual wallets, which comes in handy when watching assets move in and out of a criminals’ account.
2. Off-Chain Analysis
The sleuths use off-chain analysis to tie the criminals to their real-world identities. They proceed to investigate social media accounts, domain registrations, and other valuable Web2-based information linked to the real people behind the crime.
Blockchain sleuths perform forensic investigations into the crime to gather evidences, such as recovering stolen assets or identifying the perpetrators of the illicit transactions. Many work alongside law enforcement agencies to provide insights and expertise in cybercrime investigations involving cryptocurrencies. Their analysis can aid in legal proceedings and asset recovery efforts.
Tools Used By Blockchain Sleuths
Here are the most common tools utilized by blockchain sleuths to uncover crypto-related crimes:
- Blockchain Explorers
These are websites that allows users to view all transactions that are taking place on a particular blockchain. They provide detailed information about each transaction, including timestamps, amounts sent and received, and wallet addresses involved in each transaction.
- Data Analytics Software
Blockchain sleuths use advanced software solutions to analyze large volumes of blockchain data to identify trends and patterns that may indicate fraudulent activity.
- Machine Learning Algorithms
These days, on-chain sleuths employ machine learning algorithms to enhance their analytical capabilities. These programs allow for more sophisticated detection of any anomalies, enabling them to report on the crime while it is taking place.
Notable Blockchain Sleuths
Here are some prominent on-chain sleuths:
ZachXBT
This pesudonymous X user is famous for exposing fraudulent NFT projects and crypto influencers. The man started his detective work in 2021, and has since solved multiple cases and uncovered surprising evidence on various occasions.
He has revealed crypto scams involving famous celebrities like Logan Paul and BitBoy Crypto. With over 400,000 followers on X, his work is appreciated by both crypto investors and industry leaders, primarily for his commitment to safeguarding the community from scams.
Coffeezilla
Coffeezilla is YouTube personality and crypto journalist who is well known for his investigations and uncovering of a number of big crimes in the industry. He dives into the dark side of celebrity involvements in crypto cimes and has stood up to powerful figures who have threatened him.
Coffeezilla has a very good track record in blockchain sleuthing, investigating major cases such as Safemoon and FTX. He was one of the few journalists who went up against fellow YouTuber Logan Paul, holding him accountable for his fraudulent NFT project – CryptoZoo.
Spreekaway
Spreekaway is an independent researcher and blockchain consultant whose X account provides real-time updates on some of the most notorious on-chain events and regulatory implications. He was one of the first people to discover and alert users about the Nomad Bridge hack – a DeFi platform facilitating token swaps between different blockchains that experienced a hack in 2022, resulting in a loss of over $190 million.
His efforts behind analyzing the data helped track down the transactions, which revealed the hack pattern. Spreekaways’s tweets during the time was crucial in helping the crypto community minimize the drain.
Nick Bax
Nick Bax is yet another prominent figure in the space of blockchain sleuthing. The holder of a Ph.D. in Structural Biology is also the Director of Analytics at Unciphered, a company that specializes in wallet recovery services.
He specializes in tackling both minor and major crypto hacks, and his talent is recognizing emerging criminal patterns, which offers a preemptive edge against future incidents. Bax’s unique approach to sleuting allows him to discern and disrupt sophisticated crypto hacking schemes that may abuse blockchains. He also serves as an expert witness in translating intricate on-chain data into comprehensive reports and testimonials.
JP On Chain
JP is a crypto detective and educator who is also the founder of IntelligenceOnChain (IOC), a blockchain chain investigation firm. He rose to fame studying the transactions that were going in and out of the crypto token mixer platform Tornado Cash. JP has managed to build a safety-conscious community of more 1,000 members.
Like most on-chain sleuths, JP tracks stolen funds between wallets. His deeper understanding of crypto crimes and the mentality of the perpetators led to the hiring of IOC to investigate the $75 million governance attack on Beanstalk – an Ethereum-based stablecoin protocol that suffered a major exploit in 2022, resulting in the loss of approximately $182 million in various cryptocurrencies.
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