Blockchain Papers

Usman Chohan

No abstract is available for this record.

Authors unavailable

No abstract is available for this record.

Jacob Wilson

With the explosion of Bitcoin, various cryptocurrencies are beginning to garner incredible amounts of attention from speculators and institutional investors alike. Simultaneously, the rise in the number of occurrences of cyber ransom attacks has proven to be an increasingly relevant part of the conversation in the formative years of the Bitcoin ecosystem, as hackers demand payments be in the form of bitcoin. To test the relative impact of these different ransom events on the price of bitcoin, this paper conducts an event study to quantify the reaction by investors upon revelation of the news. In addition, it examines differences between Bitcoin and two other cryptocurrencies, Ethereum and Litecoin, to control for any liquidity effects of victims buying up large sums of bitcoin. The findings of the study indicate that following the ransom events there is a positive price reaction, supporting the claim that investors in Bitcoin generally perceive these events as good news. This could have a profound effect on the development and further adoption of cryptocurrencies, as regulators try to determine whether or not to intervene.

Igor Groysman

This thesis will examine the ways in which various cryptocurrencies have impacted certain traditional crimes. While crime is always evolving with technology, cryptocurrencies are a game changer in that they provide anonymous and decentralized payment systems which, while they can be tracked in a reactive sense via the blockchain, are seen by criminals as having better uses for them than traditional fiat currencies, such as the ability to send money relatively fast to another party without going through an intermediary, or the ability to obscure the origin of the money for money laundering purposes. Every week there are new cryptocurrencies flooding the market, and it doesn’t look like it will abate any time soon. Blockchain technology, the underlying technology behind all cryptocurrencies, has uses that far surpass just the currency aspect. Criminals also see the potential that sending money anonymously, without a middleman beholden to regulations and tracking those transactions has. Any new technology while being revolutionary, will always trickle down to seedier elements of society who will always find a use for it. This paper will look at how cryptocurrencies have impacted drug trafficking, money laundering, and ransomware. I will also explore a new kind of crime called cryptojacking that has become possible because of cryptocurrency mining. Law enforcement may be playing a reactive and not a proactive role in the age of cryptocurrencies, but this paper will provide information that can be useful for law enforcement and applicable to their investigations.

Oluwaseun Viyon Ojo, Ugo Nwaokike

No abstract is available for this record.

Sarah Durrant

Cryptocurrencies are private, decentralized currencies that operate via the Internet and have attracted criminals because of the convenience and virtual anonymity they offer. While there are many descriptive accounts of cryptocurrencies and their use both in legal and illegal operations, to date there is no empirical research to understand the use of cryptocurrencies in transnational crime operations, specifically why transnational criminals may find them attractive to either conduct business or to launder their illicit proceeds. Using the environmental criminological framework, this study analyzed 100 cases of cryptocurrency use in transnational crime activities identified through various secondary sources, including online newspaper articles and publicly available court case information. Essentially this study used both quantitative and qualitative analysis to examine the ways in which cryptocurrencies facilitate transnational crimes. The findings indicate that criminals have been using cryptocurrencies to conceal the enormous amounts of money they are receiving for their crimes, specifically money laundering, drug trafficking (illicit drug sales), and terrorism financing. It was found that offenders can conduct business, launder money, and make a profit by using cryptocurrencies to facilitate their crimes, creating for crime opportunities permitted by cryptocurrencies. These opportunities include the ease of floating from one crime to another and using cryptocurrencies to cover offenders’ tracks, where cryptocurrencies can transact, launder, and conceal all in one. It was found that offenders gravitate towards using bitcoin to facilitate their operations, most likely due to its popularity and reliability. When looking at the crime of money laundering and illicit drug sales specifically, it was found that offenders can generate higher operation amounts, spanning into billions of dollars, all while evading detection. With the assumption that transnational criminals are rational beings, money laundering using cryptocurrencies has enormous benefits with these high operation amounts. This coupled with the low chances of being caught by law enforcement, makes money laundering a feasible crime where the benefits far outweigh the risks. This exploratory research is innovative and imperative to expanding academic knowledge on the evolution of crime with the use of cryptocurrencies and assisting in reducing the opportunities cryptocurrencies allow in transnational crime operations.

Chris Stokel-Walker

No abstract is available for this record.

Maisha Afrida Tasnim, Abdullah Al Omar, Mohammad Shahriar Rahman, Md Zakirul Alam Bhuiyan

No abstract is available for this record.

Chenwei Zhang, Ruibin Wei, Xiaozhong Liu

ABSTRACT Darknet markets (DNM) and bitcoins are two emergent topics in the information field and have attracted much attention. However, few has explored them together. This study aims at understanding the relation between them. It is investigated that whether the bitcoin exchange value and the public interest in it are predictable of the daily sales in the darknet markets in the future. By applying the Granger‐causality analysis, we find that the daily bitcoin exchange value with one day lag are Granger causative of the sales, so does the daily searching frequency in Google with one, two, and three‐day(s) lags. From the linear regressions, we find that the increasing bitcoin price reduces the daily DNM sales, while the increasing public interest in bitcoins facilitate the sales. By understanding relation between the DNM sales and bitcoins, two emergent topics in information science, we can get some insights on how to monitor the activities in the DNM, especially those illegal transactions and can further extend to how to regulate the DNM.

Douglas Orr, Drew M. Lancaster

No abstract is available for this record.

Andrew LR, Douglas AO

Bitcoin is a decentralized, pseudonymous, virtual currency which has been linked to many nefarious activities, such as money laundering, ransomware demands, and the purchase of contraband goods and services. Although it has many redeeming features such as low transaction costs, no charge-backs, and service to the world’s 2.5 billion unbanked, the public has become aware of Bitcoin through spectacular news stories of corruption and criminal activities. Techniques to investigate Bitcoin and to identify its users are therefore required to enforce laws and protect the public. This paper discusses what Bitcoin is and how it works, and explores various investigative methodologies to perform Bitcoin network analysis, transactional analysis, and wallet analysis. Finally, this paper discusses emerging issues and suggests areas for improvement with the goal of gaining general acceptance of investigative techniques for admissibility as scientific evidence in courtroom testimony.

Patrick Rosenberger

No abstract is available for this record.

Authors unavailable

The US Government has now officially blamed North Korea for the recent WannaCry ransomware campaign. The attribution was made with the agreement of the governments of the UK, Australia, Canada, New Zealand and Japan and based on an analysis presented to those countries but not publicly available.

Husam Basil Al Jawaheri, Mashael Al Sabah, Yazan Boshmaf

Recently, more than 100,000 cases for ransomware attacks were reported in the Middle East, Turkey and Africa region [2]. Ransomware is a malware category that limits the access of users to their files by encrypting them. This malware requires victims to pay in order to get access to the decryption keys. In order to remain anonymous, ransomware requires victims to pay through the Bitcoin network. However, due to an inherent weakness in Bitcoin's anonymity model, it is possible to link identities hidden behind Bitcoin addresses by analyzing the blockchain, Bitcoin's public ledger where all of the history of transactions is stored. In this work, we investigate the feasibility of linking users, as identities represented by Bitcoin's public addresses, to addresses owned by entities operating ransomware. To demonstrate how such linking is possible, we crawled BitcoinTalk, a famous forum for Bitcoin related discussions, and a subset of Twitter public datasets. Out of nearly 5B tweets and 1M forum pages, we found 4.2K and 41K unique online identities, respectively, along with their public personal information and Bitcoin addresses. Then we expanded these datasets of users by using closure analysis, where a Bitcoin address is used to identify a set of other addresses that are highly likely to be controlled by the same user. This allowed us to collect thousands more Bitcoin addresses for the users. By analyzing transactions in the blockchain, we were able to link 6 unique identities to different ransomware operators including CryptoWall [1] and WannaCry [3]. Moreover, in order to get insights into the economy and activity of these Ransomware addresses, we analyzed the money flow of these addresses along with the timestamps associated with transactions involving them. We observed that ransomware addresses were active from 2014 to 2017, with an average lifetime of nearly 62 days. While some addresses were only active during a certain year, others were operating for more than 3 years. We also observed that the revenue of these malware exceeds USD 6M for CryptoWall, and ranges from USD 3.8K to USD 700K for ransomware such as WannaCry and CryptoLocker, with an average number of transactions of nearly 52. One address associated with CryptoLocker ransomware also had a large amount of Bitcoins worth more than USD 34M at the time of writing. Finally, we believe that such type of analysis can potentially be used as a forensic tool to investigate ransomware attacks and possibly help authorities trace the roots of such malware. 1- «Ransom Cryptowall.» Symantec. June 14, 2014. Accessed November 01, 2017. https://www.symantec.com/security_response/writeup.jsp?docid = 2014-061923-2824-99.2 - Varghese, Joseph. «Ransomware could be deadly, cyber security expert warns.» Gulf Times. May 05, 2017. Accessed November 01, 2017. http://www.gulf times.com /story/546937/Ransomware-could-be-deadly-cyber-security-expert-w.3- Woollaston, Victoria. «WannaCry ransomware: what is it and how to protect yourself.» WIRED. June 28, 2017. Accessed November 01, 2017. http://www.wired.co.uk/article/wannacry-ransomware-virus-patch .

Jens Röwekamp

The scandal around Facebook and Cambridge Analytica in 2017 showed drastically that new concepts to share andstore information need to be developed in order to minimize the huge potential for abuse resulting from centralized information stored at trusted third parties. This thesis analysed to what degree current document exchange systems (e.g. Dropbox) comply with the information security services confidentiality, integrity, privacy, anonymity, authenticity of authors, non-repudiation, and accountability; with the result that all analysed systems lack support for privacy and anonymity. Mainly due to their centralized design, missing (meta)data encryption, and regulations of jurisdictions in which they operate. Based on that analysis a decentralized concept for document sharing in a peer-to-peer fashion utilising client-side encryption, the separation of data and metadata, metadata masking through Tor hidden services, and distributed ledger technology for directory service provision, was developed. The concept was proven through prototype implementation of a document exchange software called docShare and its information security services were compared with former analysed exchange technologies. The analysis showed that docShare has a better information security service provision but is still leaking identity information in form of IPad dresses when interacting with the distributed ledger Ethereum. Mainly because Ethereum doesn’t support traffic anonymization through Tor.

Sergey Avdoshin, Vladimir A. Lazarenko

Bitcoin is the most popular cryptocurrency on the planet. It relies on strong cryptography and peer-to-peer network. Bitcoin is gaining more and more popularity in criminal society. That is why Bitcoin is often used as money laundering tool or payment method for illegal products and services. In this paper we explore various methods for Bitcoin users deanonimization, which is an important task in anti-money laundering process and cybercrime investigation.

Benjamin Fabian, Tatiana Ermakova, Jonas Krah, Ephan Lando · 5 authors

No abstract is available for this record.

Ilaria Bertazzi, Sylvie Huet, Guillaume Deffuant, Floriana Gargiulo

Bitcoin-otc is a peer to peer (over-the-counter) marketplace for trading with bit- coin crypto-currency. To mitigate the risks of the p2p unsupervised exchanges, the establishment of a reliable reputation systems is needed: for this reason, a web of trust is implemented on the website. The availability of all the historic of the users interaction data makes this dataset a unique playground for studying reputation dynamics through others evaluations. We analyze the structure and the dynamics of this web of trust with a multilayer network approach distin- guishing the rewarding and the punitive behaviors. We show that the rewarding and the punitive behavior have similar emergent topological properties (apart from the clustering coefficient being higher for the rewarding layer) and that the resultant reputation originates from the complex interaction of the more regular behaviors on the layers. We show which are the behaviors that correlate (i.e. the rewarding activity) or not (i.e. the punitive activity) with reputation. We show that the network activity presents bursty behaviors on both the layers and that the inequality reaches a steady value (higher for the rewarding layer) with the network evolution. Finally, we characterize the reputation trajectories and we identify prototypical behaviors associated to three classes of users: trustworthy, untrusted and controversial.

Aljosha Judmayer, Nicholas Stifter, Philipp Schindler, Edgar Weippl

No abstract is available for this record.

Ross Anderson, Ilia Shumailov, Mansoor Ahmed

No abstract is available for this record.

JT Hamrick, Farhang Rouhi, Arghya Mukherjee, Amir Feder · 7 authors

The surge of interest in cryptocurrencies has been accompanied by a proliferation of fraud. This paper examines a pervasive tactic long known to financial markets: pump and dump schemes. While the fundamentals of the ruse have not changed in the last century, the recent explosion of nearly 2, 000 cryptocurrencies in a largely unregulated environment has greatly expanded the scope for abuse. The paper first quantifies the scope of cryptocurrency pump and dump on Discord and Telegram, two widely popular group messaging platforms with 130 million users and 200 million users respectively. Both platforms can handle large groups with thousands of users, and they are the most popular outlets for pump and dump schemes involving cryptocurrencies. We identified 3, 767 different pump signals advertised on Telegram and another 1, 051 different pump signals advertised on Discord during a six-month period in 2018. The schemes promoted more than 300 cryptocurrencies. These comprehensive data provide the first measure of the scope of pump and dump schemes across cryptocurrencies and suggest that this phenomenon is widespread and often quite profitable. This should raise concerns among regulators. We then examine which factors that affect the "success" of the pump, as measured by the percentage increase in price near the pump signal. We find that the coin's rank (market capitalization/volume) is the most important factor in determining the profitability of the pump: pumping obscure coins (with low volume) is much more profitable than pumping the dominant coins in the ecosystem.

Stephen Chan, Jeffrey Chu, Yuanyuan Zhang, Saralees Nadarajah

In financial trading, cryptocurrencies like bitcoin use decentralization, traceability, and anonymity features to perform transactional activities. These digital currencies, using the emerging blockchain technologies, are forming the basis of the largest unregulated markets in the world. This creates various regulatory challenges, including the illicit purchase of drugs and weapons, money laundering, and funding terrorist activities. This chapter analyzes various legal and ethical implications, their effects, and various solutions to overcome the inherent issues that are currently faced by the policymakers and regulators. The authors present the result of an analysis of 30 recently published peer-reviewed scientific publications and suggest various mechanisms that can help in the detection and prevention of illegal activities that currently account for a substantial proportion of cryptocurrency trading. They suggest methods and applications that can also be used to identify the dark marketplaces in the future.

Usman W. Chohan

This discussion paper examines the recent history of cryptocurrency thefts and exchanges shutdowns, focusing specifically on the largest cryptoinstrument: Bitcoin. The examination of thefts and shutdowns are intended to draw academic attention to the accountability deficits that pervade the cryptocurrency space, and the findings of the paper suggest that a much more robust accountability, transparency, and oversight architecture must be put in place vis-a-vis cryptocurrencies.

Weili Chen, Zibin Zheng, Jiahui Cui, Edith C.‐H. Ngai · 6 authors

Blockchain technology becomes increasingly popular. It also attracts scams, for example, Ponzi scheme, a classic fraud, has been found making a notable amount of money on Blockchain, which has a very negative impact. To help dealing with this issue, this paper proposes an approach to detect Ponzi schemes on blockchain by using data mining and machine learning methods. By verifying smart contracts on Ethereum, we first extract features from user accounts and operation codes of the smart contracts and then build a classification model to detect latent Ponzi schemes implemented as smart contracts. The experimental results show that the proposed approach can achieve high accuracy for practical use. More importantly, the approach can be used to detect Ponzi schemes even at the moment of its creation. By using the proposed approach, we estimate that there are more than 400 Ponzi schemes running on Ethereum. Based on these results, we propose to build a uniform platform to evaluate and monitor every created smart contract for early warning of scams.