Researchers from Friedrich-Alexander-Universität Erlangen-Nürnberg have published a paper detailing methods that can be used by investigators and courts to determine the validity of deanonymized data on the Bitcoin (BTC) blockchain. The paper, “Argumentation Schemes for Blockchain Deanonymization”, outlines a procedure for conducting, verifying and presenting investigations of cryptocurrency-related crimes.
As the blockchain is transparent, any data added to it is made available to anyone with access. Investigating who is behind a wallet can be done by using the information from blockchain transactions as evidence to form a digital paper trail. However, while blockchain technology has advanced, the legal aspect of investigations has become the bottleneck.
Law enforcement agencies have the tools needed to conduct preliminary blockchain analysis, however the data points are only circumstantial evidence. To validate this evidence, an exchange must be compelled to disclose the identity or bank information of a suspect.
The Wall Street Market case is an example of a successful blockchain investigation, in which the operator of an illegal dark web marketplace was identified. The research team argues that when properly conducted, blockchain investigations can reveal the perpetrator of a crime, while ensuring rights of suspects are not impinged upon.
The paper proposes a standard framework containing five argumentative schemes to ensure proper reporting and explanation throughout the legal process. These schemes each use a set of premises to frame a conclusion, and also provide questions to assess the strength of the argument. By using the schemes, an analyst can clearly articulate the heuristics employed while increasing the comprehensibility of analysis and court proceedings.