Cryptocurrency and Blockchain Forensics

Why It Matters Today (2025)

• Widespread use of cryptocurrencies (Bitcoin, Ethereum, Monero, stablecoins).

• Ransomware and darknet markets often demand payment in crypto.

• Fraud, theft, and DeFi hacks are increasingly common.

• Blockchain-based systems (e.g., NFTs, smart contracts) introduce new attack vectors and forensic challenges.

Key Focus Areas in Crypto & Blockchain Forensics

1. Transaction Tracing

• Following the flow of funds from one wallet to another.

• Use of blockchain explorers and graph analysis tools.

• Taint analysis, clustering, and wallet attribution techniques.

2. Wallet Attribution

• Linking wallet addresses to:

  • Exchanges (Coinbase, Binance, etc.)

  • Individuals (via KYC/AML info)

  • Darknet actors

• Know Your Customer (KYC) data from regulated exchanges is key to identifying owners.

3. De-anonymization Techniques

• For Bitcoin and similar pseudonymous coins:

  • Multi-input analysis

  • Dusting attacks

  • Address reuse analysis

• For privacy coins (e.g., Monero, Zcash):

  • Limited visibility — require network layer analysis, timing correlation, or exchange-level records.

4. Exchange Interaction Analysis

• Following the movement of funds to/from crypto exchanges.

• Exchanges often serve as on-ramps or off-ramps, converting crypto to fiat.

• Law enforcement subpoenas are essential for exchange data access.

5. Smart Contract and DeFi Forensics

• Auditing and reverse-engineering smart contracts (e.g., Uniswap, lending protocols).

• Investigating rug pulls, flash loan attacks, or NFT scams.

• On-chain evidence includes:

  • Contract deployment

  • Function calls (e.g., transfer, mint, burn)

6. Cold Wallet and Hardware Wallet Analysis

• Seizing and analyzing hardware wallets (Ledger, Trezor).

• Extracting seed phrases or encrypted keys.

• Possible memory or chip-level forensics (e.g., with Side-channel attacks).

Common Tools Used