project spotlight | 7 March 2023

Project Spotlight: Cryptocurrency Analysis and Attribution


We are disrupting illicit and adversarial cryptocurrency transactions. 

Portfolio: Cyber and Telecom

Commercial Partners: CipherTrace, Coinbase, TRM Labs

DoD Partner: Department of Defense

What We're Doing: In today’s digitized world, nearly every aspect of commercial and political statecraft is vulnerable to disruption, theft, or manipulation. The emergence of cryptocurrencies, in particular, is making it easier to monetize breaches in network security. Though cryptocurrency can be used for legitimate purposes, the overall lack of visibility into the ownership of cryptocurrency wallets and their associated transactions has engendered a new wave of cybercrime that includes cases of ransomware, money-laundering, and concealment of financial assets. (WION Web Team, “Russia Responsible for 74% of Ransomware Attacks in World, Hackers Bagged $400mn in Crypto: Report,” WION, last updated February 17, 2022.)

To address this rising national security threat, the DIU is prototyping a solution that is capable of tracing cryptocurrency wallets to individuals and illuminating illicit networks using transaction data, specifically for actions targeted against U.S. government and military interests. 

The team has identified a need for private sector resources to access and monitor the currency exchange to quickly shut down malicious cyber actors and their activities.

Outlook: In June 2022, DIU awarded prototype OTs to three commercial vendors, CipherTrace, Coinbase, and TRM Labs. These vendors are currently providing their platforms and intelligence feeds to help the task force teams identify cryptocurrency assets and thwart illicit transactions related to adversarial activities.

As other federal agencies ramp up their efforts to regulate the crypto space, DIU looks to collaborate with financial regulators, law enforcement, and private entities to help track and reclaim cryptocurrency that funds criminal activity. 

For more on Cryptocurrency Analysis and Attribution and other featured #cyber projects, see DIU's FY22 year in review or download our latest annual report.