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Intelligence
#Finance #Investigation #Security #Technology #Politics

Sofia Sedlova

Geotagging Crypto Derivatives Traders with NLP

Although the blockchain space supplies troves of open data to sift through, trading venue activity often remains a mystery due to unreliable trade data and a lack of transparency from trading venue owners. To fill these data gaps, we leverage a variety of Natural Language Processing (NLP) techniques that can produce reliable datasets based on the digital footprint of crypto users.

Inca Digital’s Investigation Team is often tasked with collecting hidden data on crypto market participants. Although the blockchain space supplies troves of open data to sift through, trading venue activity often remains a mystery due to unreliable trade data and a lack of transparency from trading venue owners. To fill these data gaps, we leverage a variety of Natural Language Processing (NLP) techniques that can produce reliable datasets based on the digital footprint of crypto users. In the…

TVL inflation in lending protocols

The key metric in the DeFi ecosystem, TVL, can be faked by multiple transactions. A crypto whale can move its funds and single-handedly drive up TVL.

In November 2020, Inca’s Investigation Team noticed unusual transaction patterns occurring in Compound protocol on Ethereum. These unusual transactions potentially indicate crypto whales moving large amounts of DAI across the Compound protocol to drive up the key DeFi adoption indicator – TVL.

Anomalies in OKEx trading time distributions

Distinct surges in time-of-trade graphs indicate potential scheduled trading bots activity to obfuscate privacy coin laundering. Wash trading can also be a good explanation for such trading patterns.

While many exchanges have recently started to delist privacy coins, OKEx’s Monero (XMR) and ZCash (ZEC) markets remain active with abnormal trading patterns. XMR’s time of trade distribution on OKEx noticeably falls out of the common flow of activity observed on Binance and Huobi.

Tether's Growing Role in Illegal Activities

Allowing Tether to thrive for years led to new resilience mechanisms. Today, Tether is already in use on five independent blockchains, often dominating their on-chain transactions, and, in some cases, causing network congestion. Current blockchain forensics and market surveillance tools are unable to provide acceptable levels of KYC/AML efficiency.

Tether has been the subject of multiple investigations over the past few years. Most fit in at least one of these categories: