Community Detection in Blockchain Social Networks Sissi Xiaoxiao Wu, Zixian Wu, Shihui Chen, Gangqiang Li, and Shengli Zhang
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Money Laundering Using Cryptocurrency: the Case of Bitcoin!
Athens Journal of Law - Volume 7, Issue 2, April 2021 – Pages 253-264 Money Laundering using Cryptocurrency: The Case of Bitcoin! By Gaspare Jucan Sicignano* The bitcoin, one of the most discussed topics in recent years, is a virtual currency with enormous potential and can be used almost immediately with no intervention from financial institutions. It has spread rapidly over the last few years, and all financial and governmental institutions have warned of the risk of its use for money laundering. The paper focuses on this aspect in order to understand if any purchases of bitcoins, using illicit money, can come under the anti-money laundering criminal law. Keywords: Bitcoin; Money laundering; Italian law; Cryptocurrency. Introduction The bitcoin1 is a virtual, decentralised and partially anonymous currency based on cryptography and peer-to-peer technology2. With bitcoins it is possible to buy any type of good or service securely and rapidly. Transactions need not be authorised by a central entity; rather, they are validated by all users of the platform. The system is totally secure, since it is practically impossible to hack the protocol3. Bitcoin has been much criticised over the last few years; it has quickly become public enemy number one for everything from financing terrorism to drug dealing to money laundering. It has also recently been said that bitcoin would pollute the planet due to the resources required for mining4. This paper will attempt to analyse in depth the relationship between the bitcoin and money laundering in Italian law. It will analyse the warnings issued by authorities in various sectors, as well as the opinions expressed in Italian legal literature regarding the possibility of committing money laundering and self- laundering crimes in various operations carried out using virtual currency. -
Blockchain & Cryptocurrency Regulation
Blockchain & Cryptocurrency Regulation Third Edition Contributing Editor: Josias N. Dewey Global Legal Insights Blockchain & Cryptocurrency Regulation 2021, Third Edition Contributing Editor: Josias N. Dewey Published by Global Legal Group GLOBAL LEGAL INSIGHTS – BLOCKCHAIN & CRYPTOCURRENCY REGULATION 2021, THIRD EDITION Contributing Editor Josias N. Dewey, Holland & Knight LLP Head of Production Suzie Levy Senior Editor Sam Friend Sub Editor Megan Hylton Consulting Group Publisher Rory Smith Chief Media Officer Fraser Allan We are extremely grateful for all contributions to this edition. Special thanks are reserved for Josias N. Dewey of Holland & Knight LLP for all of his assistance. Published by Global Legal Group Ltd. 59 Tanner Street, London SE1 3PL, United Kingdom Tel: +44 207 367 0720 / URL: www.glgroup.co.uk Copyright © 2020 Global Legal Group Ltd. All rights reserved No photocopying ISBN 978-1-83918-077-4 ISSN 2631-2999 This publication is for general information purposes only. It does not purport to provide comprehensive full legal or other advice. Global Legal Group Ltd. and the contributors accept no responsibility for losses that may arise from reliance upon information contained in this publication. This publication is intended to give an indication of legal issues upon which you may need advice. Full legal advice should be taken from a qualified professional when dealing with specific situations. The information contained herein is accurate as of the date of publication. Printed and bound by TJ International, Trecerus Industrial Estate, Padstow, Cornwall, PL28 8RW October 2020 PREFACE nother year has passed and virtual currency and other blockchain-based digital assets continue to attract the attention of policymakers across the globe. -
Does the Hashrate Affect the Bitcoin Price?
Journal of Risk and Financial Management Article Does the Hashrate Affect the Bitcoin Price? Dean Fantazzini 1,* and Nikita Kolodin 2 1 Moscow School of Economics, Moscow State University, Leninskie Gory, 1, Building 61, Moscow 119992, Russia 2 Higher School of Economics, Moscow 109028, Russia; [email protected] * Correspondence: [email protected]; Tel.: +7-4955105267; Fax: +7-4955105256 Received: 30 September 2020; Accepted: 27 October 2020; Published: 30 October 2020 Abstract: This paper investigates the relationship between the bitcoin price and the hashrate by disentangling the effects of the energy efficiency of the bitcoin mining equipment, bitcoin halving, and of structural breaks on the price dynamics. For this purpose, we propose a methodology based on exponential smoothing to model the dynamics of the Bitcoin network energy efficiency. We consider either directly the hashrate or the bitcoin cost-of-production model (CPM) as a proxy for the hashrate, to take any nonlinearity into account. In the first examined subsample (01/08/2016–04/12/2017), the hashrate and the CPMs were never significant, while a significant cointegration relationship was found in the second subsample (11/12/2017–24/02/2020). The empirical evidence shows that it is better to consider the hashrate directly rather than its proxy represented by the CPM when modeling its relationship with the bitcoin price. Moreover, the causality is always unidirectional going from the bitcoin price to the hashrate (or its proxies), with lags ranging from one week up to six weeks later. These findings are consistent with a large literature in energy economics, which showed that oil and gas returns affect the purchase of the drilling rigs with a delay of up to three months, whereas the impact of changes in the rig count on oil and gas returns is limited or not significant. -
Blockchain and Cryptocurrency in Africa a Comparative Summary of the Reception and Regulation of Blockchain and Cryptocurrency in Africa
Blockchain and Cryptocurrency in Africa A comparative summary of the reception and regulation of Blockchain and Cryptocurrency in Africa 2018 Baker McKenzie, Johannesburg IMPORTANT DISCLAIMER: The material in this report is of the nature of general comment only. It is not offered as legal advice on any specific issue or matter and should not be taken as such. Readers should refrain from acting on the basis of any discussion contained in this report without obtaining specific legal advice on the particular facts and circumstances at issue. While the authors have made every effort to provide accurate and up-to-date information on laws and policy, these matters are continuously subject to change. Furthermore, the application of these laws depends on the particular facts and circumstances of each situation, and therefore readers should consult their lawyer before taking any action. Information contained herein is as at November 2018. CONTENTS PREFACE ............................................................................................................................................1 GEOGRAPHICAL OVERVIEW ....................................................................................................... 2 COUNTRY PROFILES ..................................................................................................................... 3 1. Botswana ................................................................................................................................................................... 3 2. Ghana .........................................................................................................................................................................4 -
How to Not Get Caught When You Launder Money on Blockchain?
How to Not Get Caught When You Launder Money on Blockchain? Cuneyt G. Akcora1, Sudhanva Purusotham2, Yulia R. Gel2 Mitchell Krawiec-Thayer3, Murat Kantarcioglu2 1University of Manitoba, 2 UT Dallas, 3 Monero Research Lab 65 Chancellor Circle Winnipeg, MB, Canada R3T 2N2 [email protected], fSudhanva.Purushotham, ygl, [email protected], [email protected] Abstract transactions and circumvent existing AI-based money laun- dering techniques. Our insights, however, are intended not to The number of blockchain users has tremendously grown in assist criminals to obfuscate their malicious activities but to recent years. As an unintended consequence, e-crime trans- motivate the AI community for further research in this area actions on blockchains has been on the rise. Consequently, public blockchains have become a hotbed of research for de- of critical societal importance and, as a result, to advance veloping AI tools to detect and trace users and transactions the state of art methodology in the AI-based cryptocurrency that are related to e-crime. money laundering detection. We argue that following a few select strategies can make In the remainder of this paper, we first identify tech- money laundering on blockchain virtually undetectable with niques that can be used by criminals to launder money on most of the currently existing tools and algorithms. As a re- blockchain and then empirically show why these techniques sult, the effective combating of e-crime activities involving would be effective in hiding patterns used by potential AI cryptocurrencies requires the development of novel analytic models. methodology in AI. 2 Related Work 1 Introduction The success of Bitcoin (Nakamoto 2008) has encouraged Cryptocurrencies have emerged as an important rapidly hundreds of similar digital coins (Tschorsch and Scheuer- evolving financial tool that allows for cross-border transac- mann 2016). -
3Rd Global Cryptoasset Benchmarking Study
3RD GLOBAL CRYPTOASSET BENCHMARKING STUDY Apolline Blandin, Dr. Gina Pieters, Yue Wu, Thomas Eisermann, Anton Dek, Sean Taylor, Damaris Njoki September 2020 supported by Disclaimer: Data for this report has been gathered primarily from online surveys. While every reasonable effort has been made to verify the accuracy of the data collected, the research team cannot exclude potential errors and omissions. This report should not be considered to provide legal or investment advice. Opinions expressed in this report reflect those of the authors and not necessarily those of their respective institutions. TABLE OF CONTENTS FOREWORDS ..................................................................................................................................................4 RESEARCH TEAM ..........................................................................................................................................6 ACKNOWLEDGEMENTS ............................................................................................................................7 EXECUTIVE SUMMARY ........................................................................................................................... 11 METHODOLOGY ........................................................................................................................................ 14 SECTION 1: INDUSTRY GROWTH INDICATORS .........................................................................17 Employment figures ..............................................................................................................................................................................................................17 -
A View from Mining Pools
1 Measurement and Analysis of the Bitcoin Networks: A View from Mining Pools Canhui Wang, Graduate Student Member, IEEE, Xiaowen Chu, Senior Member, IEEE, and Qin Yang, Senior Member, IEEE Abstract—Bitcoin network, with the market value of $68 billion as of January 2019, has received much attention from both industry and the academy. Mining pools, the main components of the Bitcoin network, dominate the computing resources and play essential roles in network security and performance aspects. Although many existing measurements of the Bitcoin network are available, little is known about the details of mining pool behaviors (e.g., empty blocks, mining revenue and transaction collection strategies) and their effects on the Bitcoin end users (e.g., transaction fees, transaction delay and transaction acceptance rate). This paper aims to fill this gap with a systematic study of mining pools. We traced over 1.56 hundred thousand blocks (including about 257 million historical transactions) from February 2016 to January 2019 and collected over 120.25 million unconfirmed transactions from March 2018 to January 2019. Then we conducted a board range of measurements on the pool evolutions, labeled transactions (blocks) as well as real-time network traffics, and discovered new interesting observations and features. Specifically, our measurements show the following. 1) A few mining pools entities continuously control most of the computing resources of the Bitcoin network. 2) Mining pools are caught in a prisoner’s dilemma where mining pools compete to increase their computing resources even though the unit profit of the computing resource decreases. 3) Mining pools are stuck in a Malthusian trap where there is a stage at which the Bitcoin incentives are inadequate for feeding the exponential growth of the computing resources. -
Blockchain Implementation Method for Interoperability Between Cbdcs
future internet Article Blockchain Implementation Method for Interoperability between CBDCs Hyunjun Jung and Dongwon Jeong * Department of Software Convergence Engineering, Kunsan National University, Gunsan 54150, Korea; [email protected] * Correspondence: [email protected]; Tel.: +82-(063)-469-8912 Abstract: Central Bank Digital Currency (CBDC) is a digital currency issued by a central bank. Motivated by the financial crisis and prospect of a cashless society, countries are researching CBDC. Recently, global consideration has been given to paying basic income to avoid consumer sentiment shrinkage and recession due to epidemics. CBDC is coming into the spotlight as the way to manage the public finance policy of nations comprehensively. CBDC is studied by many countries. The bank of the Bahamas released Sand Dollar. Each country’s central bank should consider the situation in which CBDCs are exchanged. The transaction of the CDDB is open data. Transaction registers CBDC exchange information of the central bank in the blockchain. Open data on currency exchange between countries will provide information on the flow of money between countries. This paper proposes a blockchain system and management method based on the ISO/IEC 11179 metadata registry for exchange between CBDCs that records transactions between registered CBDCs. Each country’s CBDC will have a different implementation and time of publication. We implement the blockchain system and experiment with the operation method, measuring the block generation time of blockchains using the proposed method. Keywords: CBDC; CBDC exchange; ISO/IEC 11179; CBDC interoperability blockchain system Citation: Jung, H.; Jeong, D. Blockchain Implementation Method for Interoperability between CBDCs. Future Internet 2021, 13, 133. -
Blockchain Consensus: an Analysis of Proof-Of-Work and Its Applications. Amitai Porat1, Avneesh Pratap2, Parth Shah3, and Vinit Adkar4
Blockchain Consensus: An analysis of Proof-of-Work and its applications. Amitai Porat1, Avneesh Pratap2, Parth Shah3, and Vinit Adkar4 [email protected] [email protected] [email protected] [email protected] ABSTRACT Blockchain Technology, having been around since 2008, has recently taken the world by storm. Industries are beginning to implement blockchain solutions for real world services. In our project, we build a Proof of Work based Blockchain consensus protocol and evauluate how major applications can run on the underlying platform. We also explore how varying network conditions vary the outcome of consensus among nodes. Furthermore, to demonstrate some of its capabilities we created our own application built on the Ethereum blockchain platform. While Bitcoin is by and far the first major cryptocurrency, it is limited in the capabilities of its blockchain as a peer-to-peer currency exchange. Therefore, Ethereum blockchain was the right choice for application development since it caters itself specifically to building decentralized applications that seek rapid deployment and security. 1 Introduction Blockchain technology challenges traditional shared architectures which require forms of centralized governance to assure the integrity of internet applications. It is the first truly democratized, universally accessible, shared and secure asset control architecture. The first blockchain technology was founded shortly after the US financial collapse in 2008, the idea was a decentralized peer-to-peer currency transfer network that people can rely on when the traditional financial system fails. As a result, blockchain largely took off and made its way into large public interest. We chose to investigate the power of blockchain consensus algorithms, primarily Proof of Work. -
Time-Dilation Attacks on the Lightning Network
Time-Dilation Attacks on the Lightning Network Antoine Riard Gleb Naumenko [email protected] [email protected] ABSTRACT Per time-dilation attacks, a malicious actor slows down block deliv- Lightning Network (LN) is a widely-used network of payment ery to the victim and then finalizes an expired state of the Lightning channels enabling faster and cheaper Bitcoin transactions. In this channel on-chain, before a victim can notice. paper, we outline three ways an attacker can steal funds from For a non-infrastructure attacker eclipsing full nodes is difficult, honest LN users. The attacks require dilating the time for victims to but definitely not impossible, as demonstrated by prior work[19, become aware of new blocks by eclipsing (isolating) victims from 30, 37]. Since full nodes in the LN are often used by hubs (or big the network and delaying block delivery. While our focus is on service providers), we will show that an attacker may justify the the LN, time-dilation attacks may be relevant to any second-layer high attack cost by stealing their aggregate liquidity during one protocol that relies on a timely reaction. short (several hours) Eclipse attack. According to our measurements, it is currently possible to steal At the same time, we will demonstrate that Eclipse attacks are the total channel capacity by keeping a node eclipsed for as little as 2 easier to carry out against the many LN users whose wallets rely on hours. Since trust-minimized Bitcoin light clients currently connect light client protocols to obtain information from the Bitcoin network, to a very limited number of random nodes, running just 500 Sybil and light client implementations are currently more vulnerable to nodes allows an attacker to Eclipse 47% of newly deployed light Eclipse attacks then full nodes. -
Biva : Bitcoin Network Visualization & Analysis
This document is downloaded from DR‑NTU (https://dr.ntu.edu.sg) Nanyang Technological University, Singapore. BiVA : Bitcoin network visualization & analysis Oggier, Frédérique; Phetsouvanh, Silivanxay; Datta, Anwitaman 2018 Oggier, F., Phetsouvanh, S., & Datta, A. (2018). BiVA : Bitcoin network visualization & analysis. Proceedings of 2018 IEEE International Conference on Data Mining Workshops (ICDMW). doi:10.1109/ICDMW.2018.00210 https://hdl.handle.net/10356/88895 https://doi.org/10.1109/ICDMW.2018.00210 © 2018 IEEE. Personal use of this material is permitted. Permission from IEEE must be obtained for all other uses, in any current or future media, including reprinting/republishing this material for advertising or promotional purposes, creating new collective works, for resale or redistribution to servers or lists, or reuse of any copyrighted component of this work in other works. The published version is available at: https://doi.org/10.1109/ICDMW.2018.00210 Downloaded on 26 Sep 2021 15:28:46 SGT BiVA: Bitcoin Network Visualization & Analysis Fred´ erique´ Oggier Silivanxay Phetsouvanh and Anwitaman Datta Division of Mathematical Sciences School of Computer Science and Engineering Nanyang Technological University, Singapore Nanyang Technological University, Singapore Email: [email protected] Email: [email protected], [email protected] Abstract—We showcase a graph mining tool, BiVA, for visu- There are numerous works (e.g. [5], [8], [17]) that analyze alization and analysis of the Bitcoin network. It enables data and generate infographics, often of macroscopic aspects of exploration, visualization of subgraphs around nodes of interest, cryptocurrencies, such as the variation of price and volume and integrates both standard and new algorithms, including a general algorithm for flow based clustering for directed graphs, of transactions over time. -
Notice of Filing of a Proposed Rule Change to List and Trade Shares of the Wise Origin Bitcoin Trust Under BZX Rule 14.11(E)(4), Commodity-Based Trust Shares
SECURITIES AND EXCHANGE COMMISSION (Release No. 34-91994; File No. SR-CboeBZX-2021-039) May 25, 2021 Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing of a Proposed Rule Change to List and Trade Shares of the Wise Origin Bitcoin Trust under BZX Rule 14.11(e)(4), Commodity-Based Trust Shares Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act”),1 and Rule 19b-4 thereunder,2 notice is hereby given that on May 10, 2021, Cboe BZX Exchange, Inc. (the “Exchange” or “BZX”) filed with the Securities and Exchange Commission (the “Commission”) the proposed rule change as described in Items I, II, and III below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Cboe BZX Exchange, Inc. (the “Exchange” or “BZX”) is filing with the Securities and Exchange Commission (“Commission”) a proposed rule change to list and trade shares of the Wise Origin Bitcoin Trust (the “Trust”),3 under BZX Rule 14.11(e)(4), Commodity-Based Trust Shares. The text of the proposed rule change is also available on the Exchange’s website (http://markets.cboe.com/us/equities/regulation/rule_filings/bzx/), at the Exchange’s Office of the Secretary, and at the Commission’s Public Reference Room. 1 15 U.S.C. 78s(b)(1). 2 17 CFR 240.19b-4. 3 The Trust was formed as a Delaware statutory trust on March 17, 2021 and is operated as a grantor trust for U.S.