Blockchain forensics tools allow users to get valuable insights out of large amounts of blockchain data. These tools, which allow users to trace the flow of funds on the blockchain, are used both by law enforcement and cryptocurrency businesses that want to avoid doing business with suspicious entities.
What is blockchain forensics?
With the exception of specialized cryptocurrencies known as privacy coins, the most popular blockchains in use today have a fully transparent ledger of transactions. All of the transactions ever made with cryptocurrencies such as Bitcoin and Ethereum are visible to everyone.
However, navigating the massive amounts of transaction data stored on blockchains is anything but simple.
Blockchains aren’t concerned with real-world identities, and cryptocurrency addresses are not human-readable – to the human eye, a cryptocurrency address appears as a seemingly random string of letters and numbers.
The details of a (randomly selected) Bitcoin transaction. Image source: Blockchain.com
Therefore, it’s important to have tools that can automatically structure and organize blockchain data, tag addresses that are associated with specific individuals and organizations, and analyze transaction flows.
Blockchain forensics is a branch of digital forensics where blockchain data is analyzed to gather information about criminal activity. There are many different blockchain forensics tools available on the market that can be used by both law enforcement as well as cryptocurrency businesses to detect suspicious activity.
Blockchain forensics tools can help law enforcement agencies catch criminals that are moving funds on the blockchain – examples include hackers, dark web drug dealers and money launderers. Meanwhile, cryptocurrency companies can use these tools to avoid doing business with criminals and remain compliant with AML and CTF regulations.
It’s important to understand the same techniques and tools that are used to trace criminals and detect suspicious activity on the blockchain can also be used to trace legitimate users. For example, knowing what “smart money” individuals and firms are up to on the blockchain can provide a significant edge in the markets.
The Best Blockchain Forensics Tools in 2024
Without further ado, let’s get started with our selection of the best blockchain forensics tools in 2024. We’ve made sure to highlight industry-leading crypto forensics solutions that are used by top crypto businesses, as well as investigators.
1. Chainalysis
Chainalysis is the industry’s leading company for blockchain forensics and intelligence. The company’s flagship product is called Reactor, and it allows customers to analyze blockchain activity in extreme detail and connect it to real-world activity.
Reactor can be used for tracking both illicit and legitimate actors on the blockchain and includes both data collected by Chainalysis as well as OSINT (open-source intelligence) sources.
Although Chainalysis is perhaps best known for its tools that enable law enforcement to investigate financial crime on the blockchain, the company also offers several products tailored for commercial use.
For example, the company’s Playbook product allows teams behind blockchain-based applications to gain deep insights about the activity of their users. There’s also Chainalysis Kryptos, which provides in-depth cryptocurrency business metrics that allows companies to gain insights about their biggest competitors.
2. Elliptic
Elliptic is a blockchain intelligence firm that provides cryptocurrency wallet and transaction screening solutions.
The company’s Elliptic Lens product is designed for businesses who need to monitor cryptocurrency wallets to ensure that they are not conducting business with entities linked to illegal activity such as money laundering, fraud or terrorist financing. The software provides a risk score for wallets it analyzes, allowing businesses to automatically flag wallets that exceed a specified risk threshold.
Elliptic’s blockchain intelligence solutions have cross-chain capabilities, which allows them to trace the movement of funds across different blockchains. This includes blockchains such as Bitcoin, Ethereum, Cardano, Avalanche and several others.
The company also provides the Elliptic Navigator solution, which is designed to screen cryptocurrency in real time, as well as the Elliptic Investigator platform, which aims tro streamline the process of blockchain investigations.
3. Ciphertrace
Ciphertrace provides products that allow cryptocurrency businesses to monitor transactions and identify suspicious activity and risks. The company also has crypto forensics products that law enforcement agencies use to investigate blockchain activity.
Ciphertrace’s three main solutions are called Armada, Inspector and Sentry.
Armada is designed for financial institutions that need to monitor crypto-related transactions for signs of risky or fraudulent activity.
Inspector is designed for cryptocurrency forensics, as it leverages a very large database tying real-world entities to cryptocurrency addresses.
The company’s Sentry solution, on the other hand, is specialized for crypto exchanges and OTC trading desks that require transaction monitoring to comply with AML (anti money laundering) requirements.
Ciphertrace was acquired by financial services giant Mastercard in 2021. Mastercard says it plans to combine Ciphertrace’s technology and AI prowess with its own capabilities, and use it to bolster their consumer protection and compliance offerings.
4. Crystal
Crystal is a company that offers blockchain forensic analysis tools. The company also provides investigative services and reports for those looking to protect their crypto assets and reputation, along with training and certification in crypto compliance and investigations.
The company’s flagship product, Crystal Expert, can be used by both investigators as well as the compliance staff of cryptocurrency businesses that are looking to enhance their AML and KYC compliance. Crystal Expert supports more than 300 different blockchains, including more than 3,800 different crypto assets overall.
On the Crystal website, you can access a basic version of the company’s software called Crystal Lite. This free-to-use tool can be handy if you’re looking to visualize the flow of funds associated with a cryptocurrency address.
5. Arkham Intelligence
Arkham Intelligence is a blockchain analytics platform that supports a broad range of networks, including Bitcoin, Ethereum, BNB Chain, TRON, and more. It functions as a hybrid between a blockchain explorer, which allows users to view detailed information about blockchain transactions and addresses, and a crypto whale tracker, which focuses on monitoring the activities of large cryptocurrency holders.
This platform proves particularly valuable for those interested in tracking specific crypto whales. For instance, if you’re trying to identify the owner of a particular blockchain address, Arkham Intelligence often provides the most reliable insights (at least among the options that are available for free).
One of the best aspects of Arkham Intelligence is that anyone can get a substantial amount of information from the platform completely free of charge.
Those who require very specific blockchain intelligence can use Arkham Intelligence’s Intel Exchange platform to buy intel on specific cryptocurrency wallets. This information is not provided by the team behind Arkham Intelligence itself, but by on-chain researchers that are looking to monetize their expertise.
The bottom line
If you’re interested in blockchain forensics tools and services, you’re most likely looking to gain deeper insights by analyzing blockchain activity. Although most blockchain forensics solutions require a (significant) payment, you can get a surprising amount of information using free crypto whale trackers.
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