Synthetic KYC: Detecting Irregularities and Money Laundering on Blockchains

44 Pages Posted: 7 Jun 2024

See all articles by Irene Aldridge

Irene Aldridge

AbleMarkets.com; Cornell University; Able Blox

Multiple version iconThere are 2 versions of this paper

Date Written: June 06, 2024

Abstract

This research introduces a new technique for the rapid classification of wallets based on their associations with other wallets on the blockchain. Using Ethereum as an example platform, we test our technique and document significant irregularities in the user structure. We show that questionable user "wallets" and transactions are widespread on Ethereum. Consequently, extensive money laundering and fraud cannot be ruled out. These insights should benefit investors, regulators, and developers of future blockchain platforms.

Suggested Citation

Aldridge, Irene, Synthetic KYC: Detecting Irregularities and Money Laundering on Blockchains (June 06, 2024). Available at SSRN: https://ssrn.com/abstract=4856062 or http://dx.doi.org/10.2139/ssrn.4856062

Irene Aldridge (Contact Author)

AbleMarkets.com ( email )

New York, NY 10128
United States

HOME PAGE: http://www.AbleMarkets.com

Cornell University ( email )

Ithaca, NY 14853
United States

Able Blox ( email )

New York, NY

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