Scammers plague the cryptocurrency space and there have been efforts to keep better track of their activities. Now, Whale Alert is teaming up with Bitcoin Abuse to more easily identify addresses which have participated in dubious activities.
Bitcoin (BTC) provides us with quasi-anonymity. It’s near impossible to specifically link an address to an individual, but you can easily link an address to other transactions. This way, addresses can be blacklisted and monitored in case they move illicit funds.
Recently, the data and tracking networks ‘Whale Alert’ and ‘Bitcoin Abuse’ decided to apply this idea and take ‘justice’ into their own hands. The two will soon be creating a log which records addresses which have been linked to black markets and reported scams. This way, hackers and bad actors won’t be able to move their funds as easily.
This idea has been circulating in the cryptocurrency space for some time but has yet to gain significant traction. This is because exchanges seldom cooperate unless a hack or breach is significant enough to garner industry-wide attention. Normally, hackers siphon relatively smaller amounts from exchanges and off-ramp the solen funds onto others.
Ultimately, what Whale Alert is proposing is what can best be called ‘self-policing.’ Major cryptocurrency exchanges and third-party services should be monitoring the origin of deposits to ensure that they are not linked to dubious activity. This way, the exchange can remain compliant and is not participating in activities that might be criminal.
Although cryptocurrency exchanges are not liable for stolen funds being sold on their marketplaces, they still have a responsibility to the industry. Whale Alert will hopefully make this easier, but it remains to be seen whether cryptocurrency exchanges will follow.
If the cryptocurrency industry does not begin to police itself, then it will always struggle with the perception that it is ‘high risk’ and ‘lawless.’ Hopefully, the efforts from Whale Alert and Bitcoin Abuse help to tackle this problem head-on.
Do you believe that cryptocurrency exchanges should step up and blacklist addresses from known scammers and hacks? Let us know your thoughts below in the comments.