Identify the client by blockchain analysis
In Tennessee, USA, a man trying to kill his wife was found to be paying Hitman with crypto assets (virtual currency) Bitcoin (BTC). Blockchain analysis revealed the murder client and Hitman’s wallet, which led to the arrest of client Nelson Replogle.
Background of the incident
FBI Special Investigator Clay Anderson, who was contacted by a Tennessee sheriff who was accused, launched the investigation. The FBI’s Cyber Task Force analyzed the blockchain and found that the wallet used for payment was a cryptocurrency exchange Coinbase user wallet.
It was also found that the client paid the reward in Bitcoin, the date and time of the transaction that paid the reward, and the wallet address of the recipient.
Considering the threat of human life, Coinbase immediately revealed information such as the owner of this wallet and transaction history to the FBI, and it turned out that the client of the murder was Ann Replogle’s husband. A referral to Internet provider AT & T also confirmed that the transaction’s Internet connection was made from Replogle’s home.
On the other hand, Hitman is believed to have used a personally managed wallet, and the FBI has not identified Hitman. If you are using a legally compliant exchange such as Coinbase, the Customer Identification (KYC) rules will allow you to identify the person if necessary for the investigation.
In a recent similar case, a doctor in Washington State allegedly paid the perpetrator about $ 40,000 in Bitcoin to kidnap his estranged ex-wife. Traces of transactions on the dark web and elsewhere have been identified. If blockchain analysis works, it can help track the identity of criminals.
Increased information disclosure requests
According to Coinbase reports, the number of information disclosure requests from law enforcement agencies is increasing. In 2020, there were 4,227 inquiries about customer data, showing an increasing trend from 1,914 in the first half of the same year to 2,313 in the second half of the same year.
Referral sources are various government agencies such as the US FBI, Drug Enforcement Administration, tax collection authorities, Internal Revenue Service (IRS), Food and Drug Administration, and law enforcement agencies such as the United Kingdom, Germany, and France.
It suggests that the risk of related fraud is increasing against the background of soaring virtual currencies. On the other hand, there is an opinion that the myth that “Bitcoin is often used for fraudulent activities” is exaggerated.
Michael Morell, who was also the Deputy Secretary of the Central Intelligence Agency (CIA), has released a research report entitled “Analysis of Bitcoin Use in Financial Crimes,” saying that Bitcoin’s criminal use is limited.
It also introduces the opinion of experts that blockchain analysis makes it easier to detect fraudulent activities than traditional banking and cash transactions.
Relation: Former Deputy Secretary of the US Central Intelligence Agency (CIA) “The theory of Bitcoin fraud is exaggerated.”
Reference: SCRIBD, Coinbase
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“Cryptocurrency” means “cryptographic assets”