• With big profits and huge cashflows, cryptocurrency trades make fine targets for criminals.
• AI used to spot patterns in blockchains.
• Law enforcement agencies adopting similar technologies used by gangs.

Investigative analytic software company Cognyte Software Ltd. has announced a new deal with a longstanding law enforcement agency based in the Asia-Pacific region (APAC). The subscription-based deal is valued at over half a million US dollars annually, is designed to help the national police agency combat illicit cryptocurrency activity using Cognyte’s blockchain analytics platform.

Cognyte’s AI-based solution is designed to speed up cryptocurrency investigations and address illegal activity in the market. It should help the police agency to identify individuals or groups involved in cryptocurrency-related crimes without having to rely on data or explicit cooperation from cryptocurrency exchanges.

The technology uses blockchain intelligence, machine learning, AI, and OSINT techniques to help investigators analyse blockchain data and identify hidden patterns or connections between trades and traders at a forensic level. The goal is to expose criminals who commit cybercrime, including those in organised crime groups, individuals and gangs suspected of financing terrorism, and money laundering from illegal activities. This analysis is possible even when criminals think they are anonymous thanks to encryption.

Global illegal cryptocurrency transactions totalled over $24 billion in 2023 with an increase in bad actors using cryptocurrencies to evade or circumvent laws and economic strictures. AI and advanced technologies are being used to develop and evolve sophisticated techniques by crime perpetrators, as potential profits for illegal activities can be huge.

Efi Nuri, Chief Revenue Officer at Cognyte, discussed the role blockchain analytics has in investigating obfuscated transactions. “Cognyte’s advanced blockchain analytics helps to de-anonymise hidden transactions in financial investigations and mitigate the harm caused by criminal enterprises exploiting cryptocurrency networks [in] use cases like terrorist funding and darknet market illicit activity.”

According to Nuri, Cognyte’s solution will allow its customer to “gain blockchain intelligence that was previously unattainable, [helping] investigators safeguard the integrity of digital financial ecosystems, and bring criminals to justice.”

Cognyte has positioned itself as an organisation specialising in new AI solutions that help law enforcement agencies combat financial fraud, often using the same techniques as the bad actors. It claims investigations into illicit cryptocurrency activities progress more quickly with its platform, and so allow law enforcement agencies to confiscate and return any cryptocurrency that proves to be linked to illegal activity.

Removing bad actors from cryptocurrency ecosystems means law enforcement authorities can create a safer, more transparent digital financial landscape, and increase levels of trust in existing and emerging digital markets.

The company’s deal with the unnamed law enforcement agency gives Cognyte the resources to expand its offerings to more customers, particularly other law agencies. Law enforcement organisations are coming under growing pressure to address the increase cyber crime in the region.

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