New global group formed to curtail cyber criminals from using blockchain to avoid law detection

A group of 15 consortium members from seven European countries has initiated this week a new project to curtail criminals and attackers from using blockchain technology to avoid law detection, while at the same time respecting the privacy rights of legitimate users. Blockchain technology is an electronic ledger under decentralized control, which allows it to evade traditional investigative measures.

The best-known application of blockchain technology is Bitcoin, which has many legitimate uses but is also used for criminal purposes in the so-called dark web (i.e., the part of the internet that is beyond the reach of Google and other search engines). The attackers who froze computers in 150 countries last Friday, 12 May, demanded a ransom paid in Bitcoin.

The researchers are in a consortium undertaking a three-year, €5 million project, funded by the European Union aimed at developing technical solutions for investigating and mitigating crime and terrorism involving virtual currencies and underground market transactions.

The researchers, including four law enforcement agencies (LEAs) and INTERPOL, aim to develop and implement tools to reveal common characteristics of criminal transactions, detect anomalies in their usage, and identify money-laundering techniques. The researchers will also conduct training activities in order to develop skills and knowledge among EU law enforcement agencies. As part of their project, which is called TITANIUM (Tools for the Investigation of Transactions in Underground Markets), the researchers plan to test and validate their tools and services on the premises of the LEAs to assess the effectiveness and overall impact of the project results.

Project co-ordinator Ross King, a senior scientist at the AIT Austrian Institute of Technology GmbH, said, “Criminal and terrorist activities related to virtual currencies and darknet markets evolve quickly and vary in technical sophistication, resilience and intended targets.”

To counter such activities, Dr King said it was necessary to develop efficient and effective forensics tools enabling the reasonable use of different types of data from different sources including virtual currency ledgers, online forums, peer-to-peer networks of underground markets, and seized devices.

Dr. King also emphasized that the tools developed within the TITANIUM project will respect individual privacy and other fundamental rights. “The consortium will analyze legal and ethical requirements and define guidelines for storing and processing data, information, and knowledge involved in criminal investigations without compromising citizen privacy.”