Tracers in the Dark: The Global Hunt for the Crime Lords of Cryptocurrency

by Andy Greenberg

In the final draft of the paper Meiklejohn and her co-authors put together, they definitively stated conclusions—based for the first time on solid, empirical evidence—that flew in the face of what many Bitcoin users believed at the time: Far from being untraceable, they wrote, the blockchain was an open book that could identify vast swaths of transactions between people, many of whom thought they were acting anonymously. “Even our relatively small experiment demonstrates that this approach can shed considerable light on the structure of the Bitcoin economy, how it is used, and those organizations who are party to it,” the paper read. “We demonstrate that an agency with subpoena power would be well placed to identify who is paying money to whom. Indeed, we argue that the increasing dominance of a small number of Bitcoin institutions (most notably services that perform currency exchange), coupled with the public nature of transactions and our ability to label monetary flows to major institutions, ultimately makes Bitcoin unattractive today for high-volume illicit use such as money laundering.”