Follow the money with OSINT methodologies.
Since its creation, cryptocurrency has been a stick in investigators’ wheels. With crypto OSINT, these roadblocks have all but disappeared.
Open Source Intelligence (OSINT) has broken into the locked-down world of cryptocurrency, bypassing pseudonymity to track cybercriminals, disrupt illicit activities and trace assets hidden away from prying eyes. Unlocking the blockchain technology that serves as a foundation for decentralized finance (DeFi), OSINT professionals are now able to ‘follow the money’ - in any investigation - like never before. These intrepid investigators are combining the principles of OSINT with blockchain analysis to address real-world challenges, and traverse the cryptocurrency ecosystem. But what exactly is crypto OSINT? What are its mechanisms and methodologies? How can I decode public ledger data to uncover crypto insights, trace illicit transactions, and more? Let’s find out.
What is Crypto OSINT?
We all know what OSINT is – now crypto OSINT brings the fastest growing intelligence field to the fastest growing asset.
Crypto OSINT is OSINT for cryptocurrency investigations. It’s a branch of OSINT techniques and tools that allow analysts to investigate cryptocurrency. Blockchains, by design, are transparent and immutable, and accessible to anyone with the right tools and knowledge. Best of all, they’re public. This is a gift to any investigator looking to use open-source intelligence to gather and analyze publicly available information from blockchain networks and associated platforms.
Crypto may be ‘21st century gold’, but OSINT is 21st century intelligence. Digital wallets, transactions, and blockchain analytics are all open to crypto OSINT investigators. This branch of OSINT is becoming particularly popular with law enforcement, as a good analyst can trace fund movements, uncover fraud, and monitor often illicit activities.
How Do Cryptocurrencies (and Blockchains) Work?
To understand crypto OSINT, it’s important to understand the basics of crypto first. At the core of cryptocurrency is blockchain technology.
This is a decentralized, distributed public ledger that records transactions across multiple ‘nodes’ – secure computers that store, verify, and share the data throughout the world. Imagine a giant digital notebook, keeping track of every time coins change hands in permanent marker; everyone can see it, but no one can change it. That’s a blockchain.
Here’s a breakdown of some elements relevant to crypto OSINT:
1. Blockchain Basics
A blockchain is (obviously) a chain of blocks. These are connected data units, with each chunk containing a list of transactions. Blocks are linked together in chronological order, and are locked tight using cryptographic hashes. Once a block is added, it becomes an immutable part of the chain. It can’t be removed, moved or changed. This maintains the integrity of the data inside.
2. Decentralization
No bank holds Bitcoin. Unlike traditional financial systems which rely on centralized authorities like banks, cryptocurrency operates on blockchain as a peer-to-peer network. There is no crypto equivalent of the Bank of England or New York Stock Exchange. This DeFi approach cuts out the middleman, making crypto faster, more independent and more volatile than Traditional Finance (TradFi), FIAT currencies like your yens, dollars or pounds.
3. Cryptographic Security
Crypto security is tighter than Fort Knox. Crypto transactions are secured using public and private key cryptography. Each user has a unique pair of keys: a public key (visible to others, including crypto OSINT investigators) and a secret private key. The public key encrypts transaction data, but only a user’s private key decrypts it. This private key is used to create a digital signature for transactions, proving a user’s ownership of the funds and right to decrypt this data.
4. Consensus Mechanisms
To add new blocks to the chain, crypto uses consensus mechanisms: Proof of Work (PoW) or Proof of Stake (PoS). Proof of Work (PoW) requires miners to solve complex puzzles using computational power, while Proof of Stake (PoS) selects only validators who stake cryptocurrency themselves to create new blocks. This makes blockchains slightly more energy-efficient, and makes sure everybody agrees on what's ‘written in the giant notebook’.
5. Transparency or Anonymity?
Every transaction being recorded on a public ledger makes crypto transparent by nature. Users’ identities are not. Crypto holders are represented by alphanumeric addresses that correspond with their wallet of coins, making them technically anonymous. However, this combination of transparency and anonymity is known as pseudonymity: users are anonymised, but their anonymised footprint can be tracked – a concept key to crypto OSINT.
How Do Crypto OSINT and Pseudonymity Interact?
The concept of pseudonymity plays a central role in OSINT for cryptocurrency.
Pseudonymity is the result of crypto’s unique combination of transparency and anonymity. Using a public key or wallet address to engage with a blockchain, rather than revealing personal information, does make you technically anonymous. However, although users are not using their real names, their actions and transactions are still publicly recorded on a blockchain for anyone to see. This creates a traceable pseudonymous identity for each user. Users may be nameless, but for crypto OSINT investigators, a wallet address is unique enough to take the place of a government name.
While individuals don't directly expose their identity, their transactions are publicly visible on a blockchain. Crypto OSINT investigators focus on these footprints; as opposed to SOCMINT investigators looking for photos and personal details, or GEOInt investigators looking for a concrete location.
Every transaction leaves a trace, and pseudonymous keys and addresses — while not directly tied to a person, or existent offline — can be analyzed over time to reflect real-world actions. An address might indicate illicit activity that’s been observed by law enforcement over the same time period, or correspond with a sum of laundered money in an AML investigation.
Pseudonymity exists for privacy, so it presents an intriguing challenge for OSINT investigators. To identify malicious actors, or track funds, investigators are working with no real names. By using simple OSINT or blockchain analysis tools, investigators can map the flow of funds, correlate wallet addresses, and uncover connections between different actors, even without knowing the exact identity of a user.
Cryptocurrency OSINT is OSINT with a difference: it leverages publicly available transaction data to build profiles, trace funds, and connect pseudonymous addresses to potential real-world crimes – without any names or faces.
Key Uses and Methodologies for Crypto OSINT
As a branch of OSINT, crypto investigations require perhaps the most specialized set of methodologies. If crypto OSINT were one of Darwin’s finches, it would have a very unusual (and valuable) beak.
In terms of uses, crypto OSINT plays a pivotal role in uncovering illicit activities and tracking financial transactions within the cryptocurrency space – a space impenetrable to almost anybody but a crypto investigator. From identifying transaction patterns to tracing wallet addresses, certain techniques help skilled crypto OSINT analysts navigate the blockchain. Let’s take a look at the key uses and methodologies for this unique species of OSINT.
Fraud Detection and Prevention
Notoriously, crypto has become a popular mechanism for scammers, hackers, and fraudsters. Scams like ‘pig butchering’, rug pulls, memecoins, fake giveaways and Bitcoin ATMS (BTMs) were rare to nonexistent before the crypto boom and rise of DeFi currency, Crypto OSINT can help identify suspicious wallet activities, detect Ponzi schemes like these, and monitor transaction patterns indicative of money laundering or confidence trickery.
Asset Tracing
So, you’ve identified that funds are stolen. How do you know where they’re hidden? Crypto OSINT is often used by financial investigators to trace these ill-gotten gains. By analyzing wallet addresses and transaction flows, investigators can follow footprints to crypto endpoints – where funds are eventually withdrawn, or converted to regular FIAT currency.
Regulatory Compliance
Just like any other vendor, crypto businesses need to comply with anti-money laundering (AML) and know-your-customer (KYC) rules and regulations. It’s necessary to make sure that businesses are operating in concurrency (pun intended) with the law. Crypto OSINT is useful to help organizations play by the rules, and also to detect compliance violations.
Threat Intelligence
Ransomware payouts. Terrorist threats. Illicit markets. International espionage. Plenty of criminal activity utilizes crypto markets, and OSINT provides valuable insights into cyber threats – and real life hazards – involving cryptocurrency transactions. Analysts using OSINT can track funds linked to criminal activities, so law enforcement to take action against the bad guys.
Investment Analysis
OSINT can tell you if your coin’s going to the moon. For investors, crypto OSINT can be ideal to study bear-vs-bull market trends, identify influential wallets, and analyze large transactions ("whale movements") that could affect cryptocurrency prices. Big money, dumb money or whichever money, OSINT can help prevent anybody getting rekt.
Challenges In Crypto OSINT (And How To Overcome Them)
All OSINT investigations have their challenges, and crypto investigations aren’t immune. Cryptocurrency may have transformed financial systems, but it can’t remove the bumps and ditches from your investigative path. In fact, some technologies like encryption and coin mixing seem developed just to obscure critical details and make life tougher for investigators. Add the sheer volume of data and the speed of market fluctuations, and OSINT cryptocurrency investigators can easily get overwhelmed.
To succeed in this environment, OSINT experts must adapt to tackle these obstacles head-on. Here’s some common roadblocks a crypto detective might face, and tips on how to overcome them.
Obfuscation Techniques
For various reasons, some crypto users really don’t want to be found. Techniques like mixers, tumblers, and privacy coins (e.g., Monero and Zcash) deliberately complicate the tracing of transactions. To get past these hurdles, try focussing on transaction patterns and timing. If a user frequently interacts with specific exchanges or services, that’s a clear link to a real-world identity. They may be using mixers, but they can’t hide their behavior patterns.
Pseudonymity (again)
In crypto OSINT, pseudonymity is a blessing and a curse. Connecting to a name is the toughest part of crypto OSINT and can be a headache for investigators. Linking an address to an individual or entity requires cross-referencing data from multiple sources. Sophisticated tools like OnChain industries and OSINT Industries Palette can help.
Large-Scale Data
The Bitcoin blockchain alone reached 5450 gigabytes in 2024 – and it grows exponentially by nearly one gigabyte a day. Blockchains generate massive amounts of data, making it challenging to analyze without advanced tools and expertise. Again, use an OSINT tool – they’re built to help you.
An Ever-Evolving Landscape
Every heard of Hover Cat Coin? New cryptocurrencies, platforms, and techniques emerge frequently, and we don’t just mean memecoins like TRUMP and MELANIAcoin or $Hawk. With over a million crypto coins created every week calls for constant updates to OSINT methodologies and tools. Luckily, OSINT is an ever-evolving thing. Subscribe to a reputable OSINT news source to help keep your skills up-to-date.
The Future of Crypto OSINT
As cryptocurrency adoption continues to grow, so will the need for crypto OSINT. Where the field will go next is anybody’s guess. Enhanced tools powered by artificial intelligence and machine learning are expected to play a critical role in simplifying blockchain analysis, automating key processes.
What’s more, collaboration between governments, private organizations, and OSINT professionals will probably be needed to tackle crime in this worldwide network. Could crypto OSINT build an international network of financial investigators practising #OSINT4Good? Only time will tell.
Returning to the present, the interaction between pseudonymity and OSINT reflects in many ways the ongoing tension between privacy and transparency in the world of cryptocurrency. Although it may look as though crypto OSINT works to disrupt the crypto world, that’s far from the case. Analysts are unlocking the potential of open-source intelligence to enhance security, transparency, and trust in blockchain systems. OSINT and crypto have a symbiotic relationship, working in perfect harmony.
To see Crypto OSINT in action, check out our Case Studies.
‘From here, it was time to involve the authorities, and make this white collar criminal sweat like a pig…’
Read: Squealing on Scammers: Exposing the Crypto-Scam Underbelly
