Shapley-value-based Explanations for Cryptocurrency Blacklist Detection

Abstract

In recent years, the utilization of Ethereum has significantly increased, positioning it as a favored platform among criminal entities. A recently proposed blacklisting method offers a compelling approach; however, its implementation faces numerous challenges. For instance, criminals may circumvent the blacklisting mechanism by creating new addresses and there are several ambiguities in their explanation. This paper explores the increasing use of Ethereum for criminal activities, focusing on the challenges of enforcing blacklisting to curb illegal transactions. We analyse blacklisting within cryptocurrency networks, particularly Ethereum, and develop features to detect illegal patterns. The study identifies unique issues in transaction networks that require specialised solutions beyond general cryptocurrency techniques. We propose a detection model based on these features and validate its effectiveness using real Ethereum datasets. The paper also reviews regulatory guidelines, highlighting ambiguities in their interpretation. Experiments on real-world data underscore the need to integrate technical methods and consider Shapley-value-based frameworks in designing effective solutions. The novelty of the method lies in its development of a feature-based detection model, leveraging Shapley-value frameworks to enhance explanation, address Ethereum’s unique challenges, and empirically validate its effectiveness using real Ethereum data, offering a more robust solution than traditional blacklisting approaches.