In the dynamic landscape of blockchain intelligence used to combat crypto fraud and financial crime, understanding and interpreting on-chain activity has progressed through significant stages. The first generation was characterised by raw blockchain data, offering a foundational layer of insights. This was followed by the second generation, attribution, which improved blockchain investigations by linking addresses to real-world entities. Now, TRM Labs announces the next leap forward: Behavioural Intelligence, marking the inception of the third generation of blockchain investigations.
TRM set the foundations for Behavioural Intelligence in 2020 with the launch of Signatures, a capability that identifies patterns across groups of transactions on-chain that are indicative of an underlying suspicious behaviour that might have otherwise gone unnoticed. Signatures allow investigators to quickly find and plot sophisticated money laundering techniques and other typologies on-chain.
To simplify data on the blockchain for investigators, TRM is enriching Behavioural Intelligence with the introduction of Transfer Labels—a dataset that enriches the context of what specific transactions signify on-chain. Currently, most tools reflect the flow of funds between entities simplistically with no signal of the purpose of the transaction. Transfer labels allow for examining a transaction to understand what is happening within it, such as messages being stored on the blockchain, the creation of a smart contract, funds being stolen on-chain or the payment of ransom.
Officials from TRM Labs said that Behavioural Intelligence combines detailed transaction analysis with pattern recognition to provide a clearer picture of blockchain activities. This is a significant development for blockchain investigations, offering both detailed insights and a broader understanding of on-chain events.
This approach will help:
Tax authorities more effectively detect tax evasion;
Law enforcement agencies uncover and act against sophisticated obfuscation techniques more quickly;
Financial institutions and cryptocurrency businesses enhance due diligence capabilities and improve regulatory compliance.
TRM Labs is making this technology available to agencies and organisations interested in deepening their understanding of blockchain activities. Behavioural Intelligence represents a significant step in the evolution of blockchain investigations, providing tools for a more nuanced analysis of blockchain data.
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