Limitations with this methodology
Collaboration with exchanges and custodial service providers for de-anonymization is applicable
in some cases. However, there are several major limitations, as we recently detailed in our eBook,
including:
Suspect's activity
Suspects must use exchanges or custodial wallets. This methodology is not applicable
if a suspect only uses a non-custodial wallet, i.e., services that do not keep funds on
behalf of their customers, or does not cash out.
Foreign service providers
Exchanges or wallets in countries without diplomatic relations or that do not require
KYC regulations pose challenges to investigation collaboration or can be too time
consuming in urgent cases.
Unregulated exchanges
There is a growing number of smaller exchanges with minimal or non-existent KYC
compliance.
Sensitive investigations
Financial investigators may in some cases be reluctant to share information with service
providers about investigations.
Mixers and Shapeshifters
The suspect may use mixers and shapeshifters to move the money to a new crypto
address before sending the money to an exchange, thereby obscuring the money trail
from the illicit activity to or from the exchange.
Fake identities
Suspects may use fake identities in their registration to exchanges or custodial wallets.
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