THIRUVANANTHAPURAM: The cyber-investigation division of the state police is set to acquire a blockchain-analysis tool to monitor cryptocurrency transactions and flag illegal activities.
The Rs 45 lakh tool, developed by an Israeli firm, will be installed at the Cyberdome Lab in Kochi by mid-December, sources said. With India leading the way in global crypto adoption, Kerala has also seen a rise in cryptocurrency use. While most users are legitimate, concerns have grown over the use of virtual assets for illicit activities such as money laundering, drug trafficking and terrorism.
The state police hitherto lacked specialised tools and depended on open-source resources to analyse questionable transactions. With open-source tools, sleuths could only conduct a linear analysis of transactions. The chain-analysis tool will provide a panoramic view of transactions, which will help officers lock in on suspicious dealings.
“Currently, cyber sleuths analyse crypto transactions on a case-by-case basis. They track the nodes, exchanges and wallets involved in the transactions using a linear method, which is cumbersome and demanding in terms of manpower,” said a source.
The chain-analysis tool, on the other hand, will make the job much easier and technically feasible. “Using the tool, investigators can easily find the flow of virtual assets to any part of the world. If the funds are funnelled to a country that’s engaged in terror activities, we can identify that. For example, if transactions are happening to Cambodia, which has emerged as a hub for financial fraud, then they can be identified and flagged,” the source added.
Another positive aspect is that the firm that created the tool has indexed crypto wallets and exchanges. “This will help in accessing details about wallets, nodes and exchanges involved in transactions during the investigation,” the source said.