When someone steals $50 million in crypto, they can’t just vanish. Blockchain forensics, the practice of analyzing public blockchain data to trace illicit transactions and identify wallet owners. Also known as crypto forensics, it’s the reason most major hacks are solved—not because the blockchain is private, but because it’s too public to hide in. Every Bitcoin, Ethereum, or Solana transaction leaves a permanent, timestamped trail. Even if a thief uses mixers or bridges between chains, skilled analysts follow the money through patterns, timing, and known exchange deposits.
Behind every major crypto recovery—like the $3.6 billion stolen from the Ronin Bridge in 2022—is a team using blockchain analysis tools, software platforms that map wallet connections, flag suspicious activity, and link addresses to real-world entities. Companies like Chainalysis and Elliptic don’t just watch the blockchain—they build profiles. They track how stolen funds move from a hacked exchange to a tumbler, then to a centralized exchange like Binance or Kraken, where KYC rules force identity verification. That’s how the FBI traced the Lavaswap exploit to a single individual in 2023. It’s not magic. It’s math, data, and persistence.
And it’s not just about catching thieves. Transaction tracing, the process of following the flow of funds across multiple addresses and blockchains. is used by regulators, insurance firms, and even legitimate businesses to prevent fraud. If your exchange gets flagged for suspicious deposits, blockchain forensics helps prove whether you’re clean or complicit. That’s why top exchanges now require these tools to stay licensed. Even decentralized platforms like Uniswap are starting to integrate on-chain monitoring to comply with global AML rules.
What you’ll find in this collection aren’t theoretical essays—they’re real cases. From how a 51% attack on Ethereum Classic left a traceable mess, to how HSMs at Coinbase prevent insiders from stealing keys, to how UK regulators now demand blockchain monitoring for every transaction over $10,000—this is the practical side of crypto security. You’ll see how immutability, once seen as just a feature, became the most powerful tool against crime. And you’ll learn why trying to hide crypto theft today is harder than ever.
Chainalysis and Elliptic are the two leading blockchain forensics tools used by law enforcement and crypto businesses to trace transactions, detect illicit activity, and ensure compliance. Learn how they work, where they differ, and who should use them.