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Combatting Crypto Crime: Trends, Tools, and Partnerships

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  • Crypto-related financial crimes like fraud and money laundering are rising exponentially requiring coordinated law enforcement action. Over $3.4 billion assets were seized in the US Silk Road case.
  • Agencies are collaborating more but need sophisticated blockchain analytics tools to trace transactions across exchanges, tumblers and privacy protocols to gather investigation evidence.
  • Specialized units like the NCET and IRS-CI's VAXU are emerging focused on virtual asset investigations and training. Public-private partnerships with blockchain analytics firms can enhance their capabilities.
  • Global bodies urge countries to equip law enforcement with advanced analytics platforms to track illicit crypto transactions, identify emerging threats and seize assets.

Global Trends

The U.S. has undertaken numerous high-profile enforcement actions, setting examples that demonstrate its serious stance on crypto-related illegality. Actions against major platforms, individuals, and criminal networks have had significant media coverage and industry impact.

Recent IRS press release confirmed the growing number of crypto-related cases by listing 4 cases involving crypto under the top ten "most prominent and high-profile" cases it investigated in 2023.

There's been a notable increase in collaboration among various agencies, both domestically and internationally. Police, FIUs, and national security agencies are working together more frequently and effectively to trace, track, and tackle crypto-related crimes. This includes sharing information, technology, and strategies to understand and combat illicit activities.

The collaborative efforts of countries in solving the Bitzlato case demonstrate the importance of international cooperation in combating financial crimes and money laundering involving cryptocurrency exchanges.

National Cryptocurrency Enforcement Team

The NCET will enhance the Criminal Division’s existing efforts to provide support and training to federal, state, local, and international law enforcement to build capacity to aggressively investigate and prosecute serious crimes involving cryptocurrency and digital assets in the United States and around the world. The NCET combats the growing criminal misuse of cryptocurrencies and digital assets, and works closely with domestic and international law enforcement, regulatory agencies, and private industry to address the illicit abuse of digital assets. 
The National Cryptocurrency Enforcement Team (NCET) has several priorities in terms of investigating and prosecuting crimes involving digital assets:

Virtual Currency Exchanges: The NCET will focus on cases involving virtual currency exchanges, which are platforms that facilitate the buying, selling, and trading of cryptocurrencies.

Infrastructure Providers: The team will also target infrastructure providers, such as blockchain networks and wallet services, that enable the misuse of cryptocurrency and related technologies.

Mixing and Tumbling Services: The NCET will investigate cases involving mixing and tumbling services, which are used to obscure the origin and destination of cryptocurrency transactions, making it difficult to trace the flow of funds.

Fraud and Extortion: The team will work on cases involving fraud and extortion, including ransomware attacks and cryptocurrency payments made to cybercriminals.

Money Laundering and Asset Recovery: The NCET will collaborate with the DOJ's Money Laundering and Asset Recovery Section to trace and recover assets lost due to fraud and extortion, including cryptocurrency payments made to ransomware groups.

Collaboration with Law Enforcement Partners: The NCET will work closely with the FBI's Virtual Asset Exploitation Unit (VAXU), which is a team of cryptocurrency experts dedicated to providing analysis, support, and training across the bureau.

International Cooperation: The NCET will coordinate with domestic and international law enforcement partners, regulatory agencies, and private industry to combat the criminal use of digital assets.

These priorities reflect the growing challenges posed by the illicit use of cryptocurrencies and digital assets, and the need for a specialized team to address these issues effectively.

There's a growing trend of public-private partnerships where law enforcement agencies are collaborating with private sector firms specializing in blockchain analytics and crypto forensics. These partnerships enhance the capabilities of law enforcement in tracking illicit crypto activities and provide the private sector with insights into regulatory expectations and trends. These trends reflect a maturing of the regulatory and enforcement landscape as it relates to cryptocurrencies. As the use of cryptocurrencies grows and evolves, it's likely that these trends will continue to develop, with law enforcement continually adapting their strategies and tools to meet new challenges.

Blockchain analytics in investigating and Tackling Crypto Crime 

Blockchain analytics leverages data science, artificial intelligence and investigative expertise to structurally tackle limitations faced by law enforcement in the decentralized world. It translates complex blockchain data into actionable intelligence about crypto crimes. 

The use cases can be multiple while main focus remains on:

Analyzing new money laundering tactics: 

Continuously upgraded platforms identify the latest money laundering typologies by analyzing blockchain data and dark web intelligence. Pattern recognition abilities can detect anomalous behaviors and emerging threats.

Tracking Illicit Transactions : 

One of the primary uses of blockchain analytics by law enforcement is to track and analyze transactions on the blockchain that are related to illegal activities such as money laundering, drug trafficking, or funding terrorism. By examining the flow of cryptocurrencies, agencies can trace the movement of funds from their origin to their final destination.

Blockchain analytics tools use advanced clustering algorithms to link pseudonymous wallet addresses and build transaction graphs. This reveals connections and transaction flows to identify illicit actors despite anonymity attempts.

Gathering Evidence:

Information gathered from the blockchain can be used as digital evidence in court cases. This is particularly useful in cases involving financial crimes, cybercrimes, or other illegal activities where cryptocurrencies were used.

Monitoring Suspicious Activities

Law enforcement agencies use blockchain analytics tools to proactively monitor and flag suspicious activities on the blockchain. This includes tracking large transactions, sudden movements of funds, or patterns that are indicative of criminal behavior.

Asset Recovery

In cases of fraud, theft, or other financial crimes, blockchain analytics can be used to trace and recover stolen assets. This is crucial in scenarios where traditional methods of asset recovery are challenging due to the decentralized nature of cryptocurrencies.

Inter-agency Collaboration

Law enforcement agencies often share blockchain-related intelligence and analytics with other agencies both domestically and internationally, to combat global cybercrime and terrorism financing networks.

Tracing DeFi transactions: 

As protocols get complex with features like mixers, swaps, and bridges, analytics tools parse on-chain data to de-obfuscate transaction flows. Forensic analysis of blockchain data enables mapping of money trails through complex DeFi protocols.

Upgrading investigator skills: 

Analytics platforms provide user-friendly graphical interfaces, transaction visualizations, and risk-scoring for entities. This makes it easier for investigators to search, analyze and visualize complex blockchain activity without needing deep technical expertise.


As cryptocurrency-based crimes advance in complexity, law enforcement requires increasingly advanced blockchain analytics capabilities for investigations and asset recovery. Agencies have realized that in-house development is infeasible. 
We enable tangible enforcement and policy outcomes through unmatched evidence gathering, contextual insights and visualization dialed to the needs of agencies and regulators. Our case-driven approaches bridge crypto and fiat perspectives to enhance confiscation while giving authorities a path to mandatory travel rule adoption by exchanges. and blogs.