Whether it’s a ransom payment or stolen funds, all crypto transactions — illicit or not — are linked to a least one public crypto address, similar to a public bank account number. That number, a unique string of more than 25 characters, can lead agents to a host of information about the person behind it. It can flag other transactions the person made and identify which exchanges or wallets an account holder uses. If those exchanges or wallets are maintained by a third-party firm, the assets are considered “centralized” and subject to seizure, experts say.
Decentralized protocols, however, are not verified or maintained by a centralized authority. They’re maintained by code. As such, they can’t be frozen.
When shifting cryptocurrency around, criminals sometimes inadvertently turn decentralized assets such as bitcoin into other digital tokens that are controlled or supported by a company. If the cryptocurrency is “flipped” into a coin run by a single entity, then the “company can actually freeze that currency, burn those tokens or otherwise exert a lot of control over that,” said Adam Lowe, chief innovation officer at CompoSecure, a cryptocurrency wallet company.
Read the full article: Tracking stolen crypto is a booming business: How blockchain sleuths recover digital loot
