These tools may provide an indirect solution using the “follow the money” methodology: once a suspicious transaction is identified on the blockchain, law enforcement agencies must collaborate with third parties such as crypto exchanges or virtual assets service providers (VASPs), which are subject to know your customer (KYC) regulations, to identify the person behind the suspicious transaction. Armed with these tools, law enforcement agencies could attempt to identify illicit transactions and follow them on the blockchain, where cryptocurrency transactions – including addresses, amounts and timestamps – are publicly available. Pre-Wasabi, detecting crimes through cryptocurrency transactions relied on tracing tools that combined open-source intelligence with public blockchain data analytics. Hyper-privacy-focused cryptocurrency users are likely familiar with Wasabi, a privacy-enhanced digital wallet for Bitcoin. Omri David, head of product management and research, Cognyte, shares how cryptocurrency criminals are readying their weapons to battle secure digital wallets like Wasabi and what law enforcement can do to prevent attacks. Wasabi is essentially a wallet in which users keep their Bitcoins and transactions anonymous, making it popular with money launderers and other criminals.

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