Chainalysis: The authorities will implement AI tools to solve crypto crimes within five years

What’s new? Michael Gronager, the CEO of the blockchain analytics company Chainalysis, predicts that law enforcement and tax authorities around the world will start using artificial intelligence to scan the blockchain and solve cryptocurrency crimes within five years.

Material by Cointelegraph

What else is known? The entrepreneur noted that this task could be significantly complicated by cryptocurrency mixers and anonymous cryptocurrencies, such as Monero (XMR) and Zcash (ZEC).

However, despite an increase in overall cryptocurrency crime, transactions involving privacy-enhancing technologies account for less than 1% of all transactions. Gronager noted that anonymous cryptocurrencies have lagged behind other projects in the industry in growth over the past 5–10 years.

US authorities placed Blender, Tornado Cash, and Sinbad mixers on a sanctions list back in 2022 for facilitating money laundering by DPRK hackers, who have been linked to funding a government weapons program. The US Treasury Department called crypto mixers a threat to national security but later denied seeking to ban such services.

Tornado Cash founders Roman Storm and Roman Semenov are under investigation in the United States, and the service’s developer Alexey Pertsev received almost 5,5 years in prison in the Netherlands. Also in March, a jury in the United States found the founder of Bitcoin Fog mixer Roman Sterlingov guilty of laundering criminal proceeds, he faces 50 years in prison. The case was also brought against the creators of the Samourai Wallet mixer.

Tornado Cash deposits volume in the first half of 2024 exceeded the result for the whole of last year, despite the sanctions

According to Flipside Crypto, the figure reached $1,9 billion

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Many exchanges, including OKX, block users for interacting with sanctioned services. Before sending funds to platforms, you should make sure that tokens received through third-party platforms are clean. This can be done using the GetBlock AML service.

As for anonymous cryptocurrencies, they are particularly actively opposed by the EU authorities. Against this background, Binance, OKX, and Kraken delisted such assets in several bloc countries or globally.

Speaking at the Token2049 conference in Singapore, the head of Chainalysis noted that the disclosure of cryptocurrency cases will eventually become the easiest because of the transparency of the blockchain and the possibility of rapid international cooperation. He added that the use of AI in this process will eliminate competition between government agencies.

Gronager believes that AI tools will be able to figure out cryptocurrency tax evaders as well, but those who did not pay fees five or more years ago probably should not expect to be held accountable.

According to the entrepreneur, some users did not pay taxes simply because they did not know how to do so, but as AI tools are implemented, “that excuse will suffice any longer.” For example, the US is already starting to adopt such tools.

In May, Chainalysis began working with Tether to monitor the USDT stablecoin secondary market to prevent illegal transactions.