Detail publikace

NEW AML TOOLS: ANALYZING ETHEREUM CRYPTOCURRENCY TRANSACTIONS USING A BAYESIAN CLASSIFIER

LYEONOV, S. TUMPACH, M. LOSKORIKH, G. FILATOVA, H. RESHETNIAK, Y. DINITS, R.

Originální název

NEW AML TOOLS: ANALYZING ETHEREUM CRYPTOCURRENCY TRANSACTIONS USING A BAYESIAN CLASSIFIER

Typ

článek v časopise ve Web of Science, Jimp

Jazyk

angličtina

Originální abstrakt

The emergence of cryptocurrencies as a form of digital payments has contributed to the emergence of numerous opportunities for the implementation of effective and efficient financial transactions, however, new fraud and money laundering schemes have emerged, as the anonymity and decentralization inherent in cryptocurrencies complicate the process of monitoring transactions and control by governments and law enforcement agencies. This study aims to develop a mechanism for analyzing transactions in the Ethereum cryptocurrency using a Bayesian classifier to identify potentially suspicious transactions that may be related to terrorist financing and money laundering. The Bayesian approach makes it possible to consider the probabilistic characteristics of transactions and their interrelationships to increase the accuracy of detecting anomalous and potentially illegal transactions. For the analysis, data on transactions of the Ethereum currency from June 2020 to December 2022 were taken. The developed mechanism involves determining a set of characteristics of transaction graph nodes that identify the potential for their use in illegal financial transactions and forming intervals of their permissible values. The article presents cryptocurrency transactions as an oriented graph, with the nodes being the entities conducting transactions and the arcs being the transactions between the nodes. In assessing the risks of using cryptocurrencies in money laundering, the number/amount of transactions to and from the respective node, the balance of these transactions (absolute value), and the type of node were considered. The analysis showed that among the 100 largest nodes in the network, 11 were identified as having a << critical >> risk level, and the most closely connected nodes were identified. This methodology can be used not only to analyze the Ethereum cryptocurrency but also for other cryptocurrencies and similar networks.

Klíčová slova

cryptocurrency;Ethereum;blockchain;;terrorist financing;money laundering;transaction analysis;Bayesian classifier

Autoři

LYEONOV, S.; TUMPACH, M.; LOSKORIKH, G.; FILATOVA, H.; RESHETNIAK, Y.; DINITS, R.

Vydáno

21. 9. 2024

Nakladatel

Fintechalliance LLC

Místo

Kyiv

ISSN

2306-4994

Periodikum

Financial and Credit Activity-Problems of Theory and Practice

Ročník

4

Číslo

57

Stát

Ukrajina

Strany od

274

Strany do

288

Strany počet

15

URL

https://fkd.net.ua/index.php/fkd/article/view/4500/4162

Plný text v Digitální knihovně

http://hdl.handle.net/11012/250753

BibTex

@article{BUT197217,
  author="Serhiy {Lyeonov} and Miloš {Tumpach} and Gabriella {Loskorikh} and Hanna {Filatova} and Yaroslav {Reshetniak} and Ruslan {Dinits}",
  title="NEW AML TOOLS: ANALYZING ETHEREUM CRYPTOCURRENCY TRANSACTIONS USING A BAYESIAN CLASSIFIER",
  journal="Financial and Credit Activity-Problems of Theory and Practice",
  year="2024",
  volume="4",
  number="57",
  pages="274--288",
  doi="10.55643/fcaptp.4.57.2024.4500",
  issn="2306-4994",
  url="https://fkd.net.ua/index.php/fkd/article/view/4500/4162"
}