Page 1
CRYPTOCURRENCY & BLOCKCHAIN · A GUIDE FOR UK LAWYERS Cryptocurrency and Blockchain Tracing Following the Money on a Public Ledger, and Naming the Person Behind the Address COMPUTER FORENSICS LAB
§ ABOUT THE AUTHOR PREPARED BY COMPUTER FORENSICS LAB E-DISCOVERY TEAM WALLET & EXCHANGE FORENSICS CPR PART 35 EXPERT REPORT S FULL CHAIN-OF-CUSTODY DOCUMENTATION
§ CONTENTS In this guide 01 Executive summary 02 The problem in plain English: visible money, hidden owners 03 How blockchains and wallets record value 04 Tracing funds across the ledger 05 Attribution: linking an address to a person 06 Obfuscation, honest limits and confidence 07 Deployment: freezing, disclosure and recovery 08 Source architecture: where else the evidence lives 09 Worked examples 10 Common mistakes and technical limitations 11 Questions to ask · Suggested wording 12 Checklist and red flags · When to involve a digital forensic expert 13 Frequently asked questions 14 Glossary · References · Disclaimer · How a specialist laboratory can assist
§ 01 · ORIENTATION Executive summary The headline point: most cryptocurrency runs on public ledgers that record every transaction permanently, so funds are highly traceable, and the real work is attribution, tying an address to a person through exchanges, devices and off-chain evidence, and doing so at honest confidence despite mixers and other obfuscation. KYC
§ 02 · FIRST PRINCIPLES The problem in plain English: visible money, hidden owners
§ 03 · HOWITRECORDSVALUE How blockchains and wallets record value LEDGER ADDRESS WALLET / KEYS EXCHANGE PERSON
Page 2
§ 04 · TRACING Tracing funds across the ledger
§ 05 · ATTRIBUTION Attribution: linking an address to a person
§ 06 · OBFUSCATIONANDHONESTLIMITS Obfuscation, honest limits and confidence
§ 07 · DEPLOYMENT Deployment: freezing, disclosure and recovery
§ 08 · THEWIDERMAP Source architecture: where else the evidence lives EVIDENCE THE EXCHANGE PER S ON'S BACKUPS / NOTES / DELETED / BLOCKCHAIN RECORDS DEVICES CLOUD PAPER RECOVERABLE
§ 09 · IN THE WILD Worked examples EXAMPLE1 · THEFRAUDTRACEDTHROUGHTHEMIXERTOTHEEXCHANGE EXAMPLE2 · THESEEDPHRASETHATPROVEDCONTROL EXAMPLE3 · THEHIDDENHOLDINGSINTHEDIVORCE
Page 3
§ 10 · WHEREITGOESWRONG Common mistakes and technical limitations Common mistakes Technical limitations
§ 11 · INTERROGATORIES & DRAFTING AIDS Questions to ask · Suggested wording Ask your client Ask your opponent (or an exchange) Ask your e Discovery / forensic provider SUGGESTED WORDING · INSTRUCTIONFORACRYPTOCURRENCYTR AC INGAND AT TRIBUTION
§ 12 · QUICK CONTROL Checklist and red flags · When to involve a digital forensic expert The crypto-tracing checklist Red flags When to involve a digital forensic expert
§ 13 · COMMON QUESTIONS Frequently asked questions Isn't cryptocurrency untraceable? If we can trace the funds, do we know who owns them? What is a seed phrase, and why does it matter so much? The funds went through a mixer. Is the trail dead? Can crypto be frozen and recovered? Could someone be hiding cryptocurrency in our matter?
§ 14 · REFERENCE Glossary Sources and authoritative references DISCLAIMER
§ HOW A SPECIALIST LABORATORY CAN ASSIST Working with Computer Forensics Lab Speak to a forensic examiner, not a salesperson. INSTRUCTTHELAB NEWENQUIRIESEMAILE - DISCOVERY
Cite as: Joseph Naghdi, Cryptocurrency And Blockchain Tracing, Computer Forensics Lab, https://e-discovery.uk/library/cryptocurrency-and-blockchain-tracing/pdf.