Bitcoin’s blockchain may seem untraceable but clearly lights up in a sea of data

Image source: pixabay – pixelcreatures

Dark net black markets might be what Bitcoin is associated to in the past, but that is no longer the case. With the ramp up on identity checks on exchanges, every single transaction is traceable from a wallet to a source.

Anonymously created wallets have now revealed the identity of 12 alleged Russian spies last month. Law enforcement used the Bitcoin network to retrace these transactions, resulting in the identification of the suspects. Blockchain developer, Tim Cotton, traced Bitcoin purchases back to Russian’s intelligence agency, the GRU, using only public information. Source: VICE news – William Turton.

Because every bitcoin transaction is recorded on a public ledger, law enforcement can trace back bitcoins to its origins. Once you trace enough steps back, an investigator could typically find some place where bitcoins were purchased or where bitcoins were used to purchase a service.
Source: VICE news – William Turton

All it takes is a permit from law enforcement for exchanges to reveal the identity of the trader. Hence criminals are no longer protected by what is known as a ‘private’ identity. It is unclear how privacy related coins can continue to hide the tracks of its users when it is pretty easy to get identified when selling off coins at exchanges.

Image source: pixabay – stevepb

Japan’s financial regulator, the Financial Services Agency (FSA), also ramped up their inspection efforts recently. On news.bitcoin – Kevin Helms, it has been reported that only three out of 16 companies were successfully allowed to operate crypto exchanges after the review.

“The biggest problem is how to deal with new operators,” FSA’s vice commissioner for policy coordination, Kiyotaka Sasaki, said at the meeting.
Source: news.bitcoin – Kevin Helms

Over 160 companies have requested and submitted their application to enter the market in Japan. This increasing number has resulted in FSA to request for additional manpower with the reviewing of the applicants.

The Japan Virtual Currency Exchange Association (Jvcea) has also established self-regulatory rules for its members of the association. They include 16 government-approved crypto exchanges: Money Partners, Quoine, Bitflyer, Bitbank, SBI Virtual Currency, GMO Coin, Bittrade, Btcbox, Bitpoint Japan, DMM Bitcoin, Bitarg Exchange Tokyo, Bitgate, Bitocean, Fisco Virtual Currency, Tech Bureau, and Xtheta. Source: news.bitcoin – Kevin Helms.

Image source: pixabay – mastersenaiper

While exchanges could provide stricter regulations such as Anti-Money Laundering rules, personal security is our first line of defense. Google security lead, Mark Risher, cautioned crypto traders against boasting of their cryptocurrency portfolio on the internet.

In a recent CNBC interview, Mr. Risher warned against revealing cryptocurrency portfolios on the net. Cyber attackers are always on the lookout for a new target to act on and scammers are attracted to forums where this information was posted.

“It could just be a case of mistaken identity or guilt by association. They could be using someone who seems to be low value to pivot toward somebody considered a higher value target, like somebody political in nature. Or maybe they saw that you were discussing Bitcoin on a public message board,” Risher said.
Source: news.bitcoin – Samuel Haig

Noting that cryptocurrencies are global currencies with no additional backing from a bank, retrieving lost funds could be a challenge. Extra caution has to be taken by coin users to avoid a case of unwanted theft.

-tysler