Cryptocurrency-Enabled Shadow Economies: On-Chain Analytics for Illicit Flow Detection

Key Points

• The study aims to investigate the detection of illicit flows within shadow economies supported by cryptocurrency.
• Utilized on-chain analytics for tracking cryptocurrency transactions related to shadow economies.
• Analyzed transaction patterns to identify potential illicit activities.
• Applied statistical models to assess the accuracy of detection methods.
• Identified a significant correlation between specific transaction patterns and illicit flows (p<0.01).
• Demonstrated that on-chain analytics accurately detected illicit activities in 75% of analyzed cases (95% CI 70-80%).
• Provided insights into effective strategies for monitoring shadow economies using blockchain technology.