This short, ongoing case study demonstrates one of the primary advantages in using cryptocurrency to detect, prevent and report financial crimes through transaction tracking.
Transparency and traceability are often misunderstood characteristics of virtual currencies that can be leveraged to fight financial crimes including human trafficking, terrorist financing, narcotics trade, and other related predicate crimes to money laundering.
What was Chainalysis’s challenge? As well as allowing customers to use Chainalysis’s products to detect fraud and identify malicious online behaviour such as money laundering, Chainalysis wanted to ensure they’re doing what they can to disrupt the commercial aspect of online child sexual abuse imagery. What was Chainalysis’s solution? By becoming a Member of the IWF, Chainalysis has access to the IWF’s database of Bitcoin addresses that are linked to online child sexual abuse imagery, through the IWF Virtual Currency Alerts. This enables them to help their law enforcement and private sector customers work together to disrupt the commercial distribution of these images. Chainalysis analysts receive the alerts and investigate the transactions associated to these alerts. Where exchanges can be identified, they are alerted and assisted in contacting the relevant law enforcement agency.