In February, Bybit, a prominent cryptocurrency exchange, fell victim to a massive hack, resulting in the theft of over US$1.5 billion worth of digital assets in one of the largest crypto heists ever recorded.
The breach targeted Bybit’s cold wallet, which is an offline storage solution intended to enhance security. The stolen assets, mostly in Ethereum, were swiftly moved through numerous wallets and converted into cash across different platforms in a process known as mixing. This kind of movement of stolen assets is akin to money laundering.
Cryptocurrency thefts have recently increased, with several people and exchanges reporting losses running into several hundred millions of dollars yearly. As a journalist, it is therefore important to follow the trail and investigate how these breaches and thefts occur.
Here are five tools that can help every journalist conduct a cryptocurrency investigation:
(1) Chainalysis
Chainalysis is one of the most popular tools journalists, law enforcement officers, and banks use to trace, trail and uncover stolen cryptocurrency assets.
It offers a wide range of data, software and services, as well as research to government bodies, exchanges, financial institutions, insurance companies, journalists and cybersecurity firms across more than 70 countries.
The tool’s data has been used in investigations and compliance around the world, and its market intelligence tools have played a crucial role in resolving some of the most notable cryptocurrency cases, while enhancing safe customer access to cryptocurrency.
(2) GeoSpy AI
This powerful AI tool is capable of accurately predicting where a photo was taken, by analyzing various elements within the image, including vegetation, architectural styles and the spacing between buildings. This image analysis can help journalists uncover trails in a cryptocurrency investigation.
Many scammers, after executing their hack, take to social media, especially Instagram, to brag and display their ill-gotten wealth for all and sundry. By taking those images and uploading them to GeoSpy AI, you can pinpoint their exact location using coordinates. This type of investigation helped seasoned crypto investigator ZachXBT nab several suspects in a $243 million hack.
Due to its popularity and ability to track and find targets, the tool now has restricted access. Public access was restricted in part due to privacy and stalking concerns emanating from the use of the tool. Journalists and newsrooms can however request access from the platform to aid in their investigations.
(3) OnChain Industries
OnChain Industries uses open-source intelligence and AI to uncover any email address, username, or cryptocurrency wallet address to reveal linked Web3 accounts.
This is particularly helpful for journalists who want to establish a link between various cryptocurrency identities, especially on Web3 platforms like OpenSea. The tool can be used to uncover money laundering, stolen assets and sanctions evasion using cryptocurrency.
It has over 100 modules (platforms) to search information from, which greatly improves the search areas. This is crucial when conducting these investigations.
The tool offers free access to law enforcement and journalists.
(4) Elliptic
Founded in 2013, Elliptic has offered blockchain analytics solutions to financial institutions and law enforcement agencies, aided in the tracking of cybercriminals, and ensured compliance with cryptocurrency regulations, especially when it comes to sanctions evasion.
The tool is designed to trace the payer’s source address back to the original source, such as a Know Your Customer wallet. Tracing the path of assets as they are being mixed is crucial to uncovering unusual patterns and helping in recovering stolen assets.
Elliptic has also incorporated artificial intelligence into its toolkits for monitoring blockchain transactions and managing risk detection. This advancement allows for quicker and more extensive data organization.
(5) Arkham Intelligence
Arkham Intelligence is a cryptocurrency exchange best known for its blockchain analysis.
It offers a sneak peek into the real-world entities associated with blockchain addresses. By using advanced AI, it analyzes, categorizes, and presents a variety of on-chain data related to tokens and entities.
This functionality allows journalists to recognize patterns, track transactions, and gain a comprehensive view of both inflows and outflows of stolen assets. Arkham Intelligence, alongside Elliptic, was able to pinpoint the hackers behind the $1.5 billion Bybit breach as the Lazarus Group from North Korea.
Journalists can use the Arkham Visualizer feature, which offers a comprehensive overview of all transactions associated with a wallet tied to a particular address, to generate swift summary reports for investigations.
Moreover, journalists can also delve deeper into the data when they identify unusual transaction patterns. For instance, if assets are transferred to an entity unrelated to the business, this can be flagged as an anomaly, prompting the need for further scrutiny of the transactions.