Law enforcement is catching up with criminals who use bitcoin to escape detection for their crimes. The imprisonment of Ross Ulbricht in February 2015 marks the most visible proof that criminals cannot hide their online activities. Czech national Thomas Jiikovsky was suspected of laundering $40 million in stolen bitcoins and in March police seized his assets.
Trendon Shavers pleaded guilty to operating a $150 million Ponzi scheme in September, marking the first bitcoin securities fraud case. That same month, police arrested Mark Karpeles for fraud and embezzlement of $390 million from the Mt. Gox cryptocurrency exchange.
Science Magazine recently reported how forensic researchers are teaming with cryptocurrency developers to use bitcoin technology to catch criminals who thought they were protected by a cryptographic wall. The evolving field of cryptographic forensics points to some shortcomings in bitcoin’s assumed privacy, a development that law enforcement welcomes.
Bitcoin’s Forensic Trail
While bitcoin is anonymous, its associated data creates a forensic trail that can be traced.
The academic researchers who helped develop the software systems and