The decentralized nature of Bitcoin allows for pseudonymous money exchange beyond authorities' control, contributing to its popularity for diverse illegal activities such as scams, ransomware attacks, money laundering, and black markets. In this paper, we characterize this landscape, providing insights into similarities and differences in the use of Bitcoin for such activities. Our analysis and the derived insights contribute to the understanding of Bitcoin transactions associated with illegal activities through three main aspects. First, our study offers a comprehensive characterization of money flows to and from Bitcoin addresses linked to different abuse categories, revealing variations in flow patterns and success rates. Second, our temporal analysis captures long-term trends and weekly patterns across categories. Finally, our analysis of outflow from reported addresses uncovers differences in graph properties and flow patterns among illicit addresses and between abuse categories. These findings provide valuable insights into the distribution, temporal dynamics, and interconnections within various categories of Bitcoin transactions related to illicit activities. The increased understanding of this landscape and the insights gained from this study offer important empirical guidance for informed decision-making and policy development in the ongoing effort to address the challenges presented by illicit activities within the cryptocurrency space.
Funding Agencies|Wallenberg AI, Autonomous Systems and Software Program (WASP) - Knut and Alice Wallenberg Foundation