{"id":619353,"date":"2024-05-01T18:07:26","date_gmt":"2024-05-01T15:07:26","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/new-ai-technique-detects-money-laundering-via-cryptocurrencies\/"},"modified":"2024-05-01T18:07:26","modified_gmt":"2024-05-01T15:07:26","slug":"new-ai-technique-detects-money-laundering-via-cryptocurrencies","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/new-ai-technique-detects-money-laundering-via-cryptocurrencies\/","title":{"rendered":"#New AI technique detects money laundering via cryptocurrencies"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_84 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a27b8c5cd414\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a27b8c5cd414\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/new-ai-technique-detects-money-laundering-via-cryptocurrencies\/#A_model_approach_to_money_laundering\" >A model approach to money laundering<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/new-ai-technique-detects-money-laundering-via-cryptocurrencies\/#Finding_crooks_with_AI\" >Finding crooks with AI<\/a><\/li><\/ul><\/nav><\/div>\n<p><img decoding=\"async\" src=\"https:\/\/img-cdn.tnwcdn.com\/image?fit=796%2C417&amp;url=https%3A%2F%2Fcdn0.tnwcdn.com%2Fwp-content%2Fblogs.dir%2F1%2Ffiles%2F2024%2F05%2FUntitled-design.jpg&amp;signature=254e72e665afc1bd77cd7aa79de96c74\" \/><\/p>\n<div id=\"article-main-content\">\n                            Blockchain is often criticised as a solution in search of a problem. But one group of people has already found immense value in the tech: money launderers.<\/p>\n<p>Their crimes cause painful headaches for <span>financial institutions, crypto businesses, legitimate law enforcement agencies, and cryptocurrency\u00a0regulators. <\/span>All of them need to tackle illicit activity on blockchains.<\/p>\n<p>Enter <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.elliptic.co\/\">Elliptic<\/a>, a British firm that specialises in cryptocurrency forensics. The company uses blockchain analytics to protect customers from financial crimes. Its latest safeguard taps the power of AI. By <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>lying machine learning to transaction data, Elliptic has created a new method of detecting money laundering on the Bitcoin blockchain.<\/p>\n<p>New research reveals the technique has already identified proceeds of crime sent to a crypto exchange, novel patterns of money laundering, and previously-unknown illicit actors.<\/p>\n<div class=\"inarticle-wrapper channel-cta\">\n<div class=\"ica-text\">\n<p class=\"ica-text__title\">TNW Conference &#8211; Are you an investor? This message is for you!<\/p>\n<p>Meet with the hottest startups and uncover your next venture on June 20-21. Hurry! Price increase May 17.<\/p>\n<\/div>\n<\/div>\n<p>The outputs have already been baked into Elliptic\u2019s products.\u00a0With further testing, the company believes the AI model could directly flag illicit transactions.<\/p>\n<p>Tom Robinson, Elliptic\u2019s co-founder and chief scientist, envisions two core use cases.<\/p>\n<p>\u201cThe primary application is in anti-money laundering, helping crypto exchanges and other businesses to identify crypto that may have originated from criminal activity,\u201d Robinson told TNW via email.<\/p>\n<p>\u201cIt could also be used by law enforcement agencies to identify new illicit services and actors making use of cryptocurrencies.\u201d<\/p>\n<h2><span class=\"ez-toc-section\" id=\"A_model_approach_to_money_laundering\"><\/span>A model approach to money laundering<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>As decentralised and (pseudo)anonymous transaction systems, blockchains are extremely attractive to money launderers. Unfortunately for them, blockchains are also ripe for AI analysis.<\/p>\n<p>By scanning ledgers of transactions and data on wallets, machine learning can spot signs of illicit payments \u2014 and the criminals behind them.<\/p>\n<p>\u201cThis probably makes cryptocurrencies more amenable to AI-based financial crime detection than traditional financial assets,\u201d Robinson said.<\/p>\n<p>Elliptic has explored the possibilities for years. Back <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/arxiv.org\/pdf\/1908.02591\">in 2019<\/a>, the company developed a machine learning model that found Bitcoin transactions made by illicit actors, such as ransomware groups and darknet marketplaces.<\/p>\n<p>The new research updated the techniques. It then applied them to an enormous dataset, containing over 200 million transactions.<\/p>\n<p>Elliptic worked with researchers from the MIT-IBM Watson AI Lab to develop the method. They decided to apply a novel approach.<\/p>\n<p>Rather than focusing on illicit wallets, the researchers trained their model on \u201csubgraphs,\u201d which represent bitcoin transaction chains. Some of these transactions involved money laundering.<\/p>\n<p>By focusing on subgraphs rather than wallets, the model could analyse the broader \u201cmulti-hop\u201d laundering process.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Finding_crooks_with_AI\"><\/span>Finding crooks with AI<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>After training, the team applied their techniques to real transactions on an unnamed cryptocurrency exchange. Their<span>\u00a0model promptly identified 52 suspicious subgraphs that ended with deposits. <\/span>The exchange then reviewed the findings.<\/p>\n<p>The response was promising. Fourteen of the 52 accounts that received the deposits had already been flagged for links to money laundering \u2014 and the real number could be higher.<\/p>\n<p>Although the remaining 38 accounts had no definitive connection to illicit activity, that doesn\u2019t mean they\u2019re guiltless.<\/p>\n<p><span>The exchange had flagged under 0.1% of its customer accounts <\/span>as suspicious. Yet these insights derived entirely <span>from off-chain information.<\/span><\/p>\n<p>The model conducts a deeper analysis. Adding this capacity to the confirmed predictions suggests the system is already performing well. With further refinement, Elliptic hopes to commercialise the techniques.<\/p>\n<p>The company also investigated the laundering patterns that the model spotted. These included \u201cpeeling chains,\u201d which wash large quantities of cryptocurrency through a lengthy <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/watch-movies-tv-seriess\/\" data-internallinksmanager029f6b8e52c=\"8\" title=\"Watch Movies &amp; TV Series\" target=\"_blank\" rel=\"noopener\">series<\/a> of small transactions, and\u00a0\u201cnested services,\u201d which use larger exchanges to conceal illicit trades.<\/p>\n<p>By identifying these behaviours, Elliptic plans to expand the scope of its tools. The company has also made the underlying data <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.kaggle.com\/organizations\/ellipticco\">publicly available<\/a>.<\/p>\n<p>\u201cWe\u2019re only scratching the surface of what is possible here,\u201d Robinson said. \u201cThis work will be extended to other blockchains and will become more and more effective as we incorporate more data.\u201d<\/p>\n<p><i><span style=\"font-weight: 400;\">One of the themes of this year\u2019s TNW Conference is Ren-AI-ssance: The AI-Powered Rebirth. If you want to dive into all things artificial intelligence, or simply experience the event (and say hi to our editorial team), we\u2019ve got something special for our loyal readers. Use the code TNWX<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/social-mediaa\/\" data-internallinksmanager029f6b8e52c=\"1\" title=\"Social Media\" target=\"_blank\" rel=\"noopener\">MEDIA<\/a> at checkout to get 30% off your <\/span><\/i><i><span style=\"font-weight: 400;\">business pass<\/span><\/i><i><span style=\"font-weight: 400;\">, <\/span><\/i><i><span style=\"font-weight: 400;\">investor pass<\/span><\/i><i><span style=\"font-weight: 400;\"> or startup packages (<\/span><\/i><i><span style=\"font-weight: 400;\">Bootstrap<\/span><\/i><i><span style=\"font-weight: 400;\"> &amp; <\/span><\/i><i><span style=\"font-weight: 400;\">Scaleup<\/span><\/i><i><span style=\"font-weight: 400;\">).<\/span><\/i>\n                        <\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMN63nwsw68G3Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more like this article, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/technology\/\" target=\"_blank\" rel=\"noopener\">Technology category.<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/thenextweb.com\/news\/ai-detects-money-laundering-through-cryptocurrencies-on-bitcoin-blockchain\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Blockchain is often criticised as a solution in search of a problem. But one group of people has already found immense value in the tech: money launderers. Their crimes cause painful headaches for financial institutions, crypto businesses, legitimate law enforcement agencies, and cryptocurrency\u00a0regulators. All of them need to tackle illicit activity on blockchains. Enter Elliptic,&#8230;<\/p>\n","protected":false},"author":1,"featured_media":619354,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/img-cdn.tnwcdn.com\/image\/tnw-blurple?filter_last=1&fit=1280%2C640&url=https%3A%2F%2Fcdn0.tnwcdn.com%2Fwp-content%2Fblogs.dir%2F1%2Ffiles%2F2024%2F05%2FUntitled-design.jpg&signature=0c9173ae60101b19697c5dc6703bfb52","fifu_image_alt":"","footnotes":""},"categories":[18],"tags":[],"class_list":["post-619353","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-technology"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/619353","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=619353"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/619353\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/619354"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=619353"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=619353"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=619353"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}