Etherscan Launches Fraud Monitoring and Address Blacklisting

Popular Ethereum (ETH) block explorer Etherscan has launched a machine-learning powered surveillance engine to flag ETH and wallets that are associated with illicit activity.

Wallets that have originated from illegal sources will now be blacklisted — allowing users to identify when coins they are receiving have a checkered history.

Etherscan blacklists funds of illegal origin

Etherscan announced its ETHProtect detection system in a blog post on April 14.

ETHProtect will generate “daily user reports on suspicious fraudulent activities” which will be reviewed and verified by Etherscan’s security research analysts.

The detection system is designed to identify funds associated with hacks, scams, phishing, exploits and other suspicious activities. The post states that ETHProtect’s “tracing is never static; the engine constantly traces and identifies any newly tainted addresses” in real-time.

The announcement also notes that previous experience has taught Etherscan that there is “no one-stop solution; it is an ever-evolving cat-and-mouse game with bad actors and their need to ‘wash’ tainted funds into fiat.”

Users can trace transfer histories of blacklisted tokens

If a user searches for a blacklisted wallet on Etherscan, the user will now encounter a red banner informing them that the funds contained within the wallet have previously been associated with criminal activity.

Users can also examine the transaction history of the specific coins that are blacklisted — allowing users to determine when the funds moved through illicit channels, and the coins’ movements since.

Wallet owners who believe they have been falsely flagged are encouraged to reach out to Etherscan directly.

Huobi purports to bolster fraud detection

On April 13, Huobi Global announced the launch of on-chain forensics tool Star Atlantis to improve its fraud identification processes.

Huobi was named alongside Binance as the two exchanges to receive the largest flows of Bitcoin (BTC) from illicit sources.

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