Automated Cryptocurrency Transaction Flow Detection System
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Solution Overview
Problem
Law enforcement and regulatory agencies face challenges in tracing and identifying crypto currency transaction flows due to the decentralized and anonymous nature of virtual currencies, which hinders efforts to combat financial crimes like money laundering and drug trafficking.
Innovation Solution
A system and method for automatically searching crypto currency transaction paths, identifying transaction flows between individuals and services, and presenting relevant information as a transaction chain, using software and hardware configurations to filter out irrelevant data and display identifiable addresses and transactions.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Productivity
If manual investigation methods are used to trace cryptocurrency transactions, then investigators can identify transaction flows, but the process requires excessive time and manual effort
Solution Approach 1:
The system performs self-service by automatically searching forward and backward transactions, determining transaction flows, identifying known addresses, and removing irrelevant data without requiring continuous manual intervention from investigators. The automated transaction flow detection system executes the entire investigation process independently, significantly reducing both manual effort and investigation time while maintaining high productivity
Solution Approach 2:
The patent replaces the mechanical manual investigation process with an automated computational system. Instead of investigators manually tracing transactions through blockchain data, the system uses automated algorithms to search transactions, determine flows, identify addresses, and filter irrelevant information, substituting human mechanical effort with automated computational processing
2Productivity
If automated transaction flow detection is implemented, then investigation efficiency is improved, but the system complexity increases
Solution Approach 1:
The automated transaction flow detection system is segmented into distinct functional modules: receiving cryptocurrency records, automatically searching forward and backward transactions, determining transaction flows, identifying known addresses, removing irrelevant data, and displaying results. This segmentation allows each module to perform a specific function independently, managing system complexity through modular design while maintaining high investigation efficiency
Solution Approach 2:
The system introduces an intermediary automated processing layer between the raw cryptocurrency transaction data and the investigator. This intermediary automatically searches transactions, determines flows, identifies addresses, and filters irrelevant information, acting as a mediator that simplifies the complex task of transaction tracing while improving efficiency
3Loss of information
If all transaction data is analyzed without filtering, then complete transaction information is obtained, but irrelevant data overwhelms the investigation process
Solution Approach 1:
The system extracts and removes irrelevant individuals and services from the transaction data while retaining complete transaction information. By automatically filtering out irrelevant addresses and transactions, the system separates useful information from noise, maintaining information completeness while significantly improving the ease of operation for investigators analyzing the data
Data Source
AI summary
Systems and methods for automatically searching crypto currency transaction paths and discovering transaction flows between individuals and identifiable services, trim or prune out irrelevant transactions and addresses, and present the relevant information as an identifiable transaction chain are provided herein. In various embodiments the present technology dramatically increases the productivity of investigators and auditors researching crypto currency transactions.