🕵️♂️ Joseph Anderson, Head of Investigations at Match Systems, shared his insights on how on-chain detectives operate today and what mistakes crypto criminals most often make.
According to him, the era of complete anonymity in cryptocurrencies is over. Modern analytical tools allow investigators to trace transaction chains and track even the most cautious offenders. Hackers who hope to hide behind mixers, bridges, or complex transaction schemes often leave “breadcrumb trails” on the blockchain.
Why “tainted” bitcoins are not equal to “clean” ones
Anderson notes that one key mistake criminals make is believing that any bitcoin is the same as another. In reality, “tainted” coins associated with theft or money laundering quickly lose liquidity. Major exchanges and payment services have learned to block such transactions, so a bitcoin that has passed through suspicious wallets is worth significantly less than a “clean” one.
Mistakes in haste
Hackers often make errors when trying to cash out stolen funds too quickly.
“We see them moving cryptocurrency through dozens of wallets or using bridges to transfer between networks. But it’s in the haste that fatal mistakes occur — for example, reusing a wallet or sending funds to an exchange with strict compliance policies,” explains the expert.
Dust attacks and meme coins
Attention is also given to so-called dust attacks — when microscopic amounts of crypto are sent to user addresses to track their subsequent actions and attempt to deanonymize owners. These schemes increasingly become evidence themselves.
As for scammy meme coins, it’s a real “Wild West.” Creators promise “X100 in a week,” but in reality use a classic “pump and dump” scheme. Most of these tokens are connected to the same groups, which change names and logos to lure new audiences.
Cases: when on-chain analytics worked
- Lazarus Group (North Korea)
Hackers stole over $600 million from the Ronin protocol (Axie Infinity game). Despite attempts to cash out through Tornado Cash and chains of fake wallets, analysts were able to track part of the asset movement. Some of the stolen funds were later frozen on exchanges. - Poly Network Hack (2021)
A hacker withdrew over $600 million exploiting a smart contract vulnerability. However, when moving funds through bridges and decentralized exchanges, they left a transaction trail that allowed analysts to trace their addresses. As a result, almost all funds were recovered. - Mt. Gox and the trail of “old bitcoins”
Even years later, “tainted” coins linked to the Mt. Gox collapse can be identified. Every attempt to move them triggers responses from exchanges and analysts. This confirms the principle: nothing disappears without a trace on the blockchain.
🛡️ The future of on-chain investigations
Anderson believes that the crypto industry is gradually becoming more transparent, and the room for maneuver for criminals is shrinking. Cooperation between exchanges, analytical firms, and law enforcement is increasing.
“The future belongs to those who operate openly. The crypto market is maturing, and sooner or later, every illegal step on the blockchain will leave a digital footprint that will lead us to the criminal,” he concluded.
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