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How does digital forensic software track cryptocurrency transactions?

Posted by ADF Solutions on May 3, 2023
ADF Solutions

Digital forensic software is used to track cryptocurrency transactions by analyzing the blockchain.The blockchain is a public ledger of all cryptocurrency transactions, and it is stored on a network of computers around the world. Digital forensic software can analyze the blockchain to identify patterns and anomalies in cryptocurrency transactions. Forensic software can also be used to determine the origin of cryptocurrency transactions, as well as to trace their path across the blockchain.

Forensic investigators rely on blockchain analysis to track the flow of cryptocurrency. Cryptocurrency is not entirely anonymous, it can be difficult to trace but not impossible [1]. Digital forensic software has made it easier for investigators to trace and uncover illegal crypto activities.

With the use of software, data from digital devices or operating systems can be extracted and analyzed. This data includes public ledger information and private ledgers such as wallet addresses.

3 Ways Digital Forensic Software Can Track Cryptocurrency 

  1. Creation and Registration of Bitcoin- whenever a new Bitcoin has created a transaction ID (TxID) that is unique is recorded on the blockchain. Every transaction on the Bitcoin network is associated with a TxID, composed of 64 characters. This TxID is used to verify that a transaction has been processed and to identify the sender, receiver, and amount of the transaction. 

    TxID can also be used to track the progress of a transaction on the Bitcoin network. They are an important part of the Bitcoin network and are used to ensure that all transactions are valid and secure. Bitcoin can then be followed through the peer-to-peer network. By examining the transaction ID and its associated data, investigators can gain valuable insight into the source of Bitcoins, how they were used, and where they ended up.
  2. Data Scraping- Data scraping involves collecting data from various sources, such as websites and blockchain explorers, and analyzing it to identify patterns or anomalies. This data includes transactions, addresses, and other metadata. Investigators also gather evidence from digital sources such as websites, social media, and other online resources. They may use data scraping to uncover patterns and trends in data that may indicate criminal activity. 

    Computer Forensics can be used to track browser history searches, for addresses or crypto transactions. To unlock wallets or addresses of interest investigators can analyze system or user artifacts. These include password vaults, static text files, notes files, or encrypted archive files [2].
  3. Artificial Intelligence and Machine Learning- Artificial intelligence (AI) and machine learning (ML) can be used to automate and improve the process of cryptocurrency forensics. AI and ML can be used to identify patterns in blockchain data, detect anomalies, and recognize criminal activities. These tools can help to identify fraudulent activity, track transactions, and provide insights into how the blockchain is being used. 

    AI and ML allow for large data sets to be collected and analyzed at once. This helps investigators save time and resources. With training, large datasets, and computer science, analysts can tailor forensic software to collect the information they need.                                                                                                                

ADF’S Digital Investigator PRO assists forensic investigators in tracking cryptocurrency. ADF software quickly processes and analyzes smartphones (iOS and Android), computers, external drives, drive images, and other media storage (USB flash drives, memory cards, etc.). Users can obtain web browser cached files, social media, P2P, Cryptocurrency, cloud storage, user login events, anti-forensic traces, saved credentials, files shared via Skype, USB history, user connection log, etc.

This automated tool gives investigators the leverage they need to analyze cryptocurrency traces With this digital evidence, investigators can identify build cases related to money laundering, fraud, and other illegal activities. 

Arm your agency with forensic software that can track cryptocurrency traces 

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Topics: Cryptocurrency Forensics

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