A Model for Detecting Cryptocurrency Transactions with Discernible Purpose

Hyochang Baek, Junhyoung Oh, Chang Yeon Kim, Kyung Ho Lee

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

The perpetration of financial fraud progresses parallel with the innovation in the field of finance. Consequently, the emergence of the blockchain technology has also manifested financial transaction obfuscation through the use of de-anonymization of the blockchain technology. This study identifies the suspicious transaction from Binance, an open-source cryptocurrency, through the means of defining and detecting the cryptocurrency wallets. By drawing the metadata of 38,526 wallets from etherscan.io, this study investigates the transactions with discernible purpose. This study performed an unsupervised learning expectation maximization (EM) algorithm to cluster the data set. Based on the features engineered from the unsupervised learning, we performed an anomaly detection using Random Forest (RF). In this study, we offered an insight into labeling the cryptocurrency wallets by providing a model for detecting the cryptocurrency with anomalous transactions. We advocate that labeling the wallets with discernible transactions may help financial institutions, private sectors, financial intelligence, and government agencies identify and detect the transactions with illicit activities.

Original languageEnglish
Title of host publicationICUFN 2019 - 11th International Conference on Ubiquitous and Future Networks
PublisherIEEE Computer Society
Pages713-717
Number of pages5
ISBN (Electronic)9781728113395
DOIs
Publication statusPublished - 2019 Jul 1
Event11th International Conference on Ubiquitous and Future Networks, ICUFN 2019 - Zagreb, Croatia
Duration: 2019 Jul 22019 Jul 5

Publication series

NameInternational Conference on Ubiquitous and Future Networks, ICUFN
Volume2019-July
ISSN (Print)2165-8528
ISSN (Electronic)2165-8536

Conference

Conference11th International Conference on Ubiquitous and Future Networks, ICUFN 2019
CountryCroatia
CityZagreb
Period19/7/219/7/5

Fingerprint

Unsupervised learning
Labeling
Finance
Metadata
Innovation
Electronic money

Keywords

  • Anti-Money Laundering
  • Blockchain
  • Cryptocurrency
  • Ethereum
  • Machine Learning
  • Smart Contract

ASJC Scopus subject areas

  • Computer Networks and Communications
  • Computer Science Applications
  • Hardware and Architecture

Cite this

Baek, H., Oh, J., Kim, C. Y., & Lee, K. H. (2019). A Model for Detecting Cryptocurrency Transactions with Discernible Purpose. In ICUFN 2019 - 11th International Conference on Ubiquitous and Future Networks (pp. 713-717). [8806126] (International Conference on Ubiquitous and Future Networks, ICUFN; Vol. 2019-July). IEEE Computer Society. https://doi.org/10.1109/ICUFN.2019.8806126

A Model for Detecting Cryptocurrency Transactions with Discernible Purpose. / Baek, Hyochang; Oh, Junhyoung; Kim, Chang Yeon; Lee, Kyung Ho.

ICUFN 2019 - 11th International Conference on Ubiquitous and Future Networks. IEEE Computer Society, 2019. p. 713-717 8806126 (International Conference on Ubiquitous and Future Networks, ICUFN; Vol. 2019-July).

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Baek, H, Oh, J, Kim, CY & Lee, KH 2019, A Model for Detecting Cryptocurrency Transactions with Discernible Purpose. in ICUFN 2019 - 11th International Conference on Ubiquitous and Future Networks., 8806126, International Conference on Ubiquitous and Future Networks, ICUFN, vol. 2019-July, IEEE Computer Society, pp. 713-717, 11th International Conference on Ubiquitous and Future Networks, ICUFN 2019, Zagreb, Croatia, 19/7/2. https://doi.org/10.1109/ICUFN.2019.8806126
Baek H, Oh J, Kim CY, Lee KH. A Model for Detecting Cryptocurrency Transactions with Discernible Purpose. In ICUFN 2019 - 11th International Conference on Ubiquitous and Future Networks. IEEE Computer Society. 2019. p. 713-717. 8806126. (International Conference on Ubiquitous and Future Networks, ICUFN). https://doi.org/10.1109/ICUFN.2019.8806126
Baek, Hyochang ; Oh, Junhyoung ; Kim, Chang Yeon ; Lee, Kyung Ho. / A Model for Detecting Cryptocurrency Transactions with Discernible Purpose. ICUFN 2019 - 11th International Conference on Ubiquitous and Future Networks. IEEE Computer Society, 2019. pp. 713-717 (International Conference on Ubiquitous and Future Networks, ICUFN).
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