Challenges with
uncovering the
true identities
of criminals
Criminal behaviors often obscure investigations even after
authorities receive third party, mainly exchange, cooperation.
Illicit actors take careful steps to cover their tracks once
crypto is converted into real-world currency. Here are some
popular behaviors that disrupt investigations:
Fake Identities
Although many centralized exchanges comply with KYC policies, criminals
are adept at using fake identities and aliases. Some techniques that
criminals use are fake driver’s licenses and synthetic biometrics.
VPNs
Some criminals bypass identification policies of exchanges by using VPNs’
secured and anonymous network access to conceal their real IP address
(see page 8). Then, they emulate IP addresses of countries that do not
mandate exchanges to require identification information.
Fraud-as-a-service
Fraud-as-a-service, also known as “peer-to-peer trading,” is a popular
technique by which third parties use their own identities at exchanges
on behalf of someone else. These third parties receive a commission for
transferring the funds from the exchange to the criminal parties involved.
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Uncovering the true identities behind
exchange transactions
Keeping up with financial investigations in the crypto age 14