We look at crypto investigators doing their part to combat fraud in Web3 and holding bad actors accountable online.
The cryptocurrency space has long attracted its share of malicious actors. From large-scale organised crimes like pig butchering scams and money laundering, to hacks and fraudulent crypto projects designed to exploit unsuspecting participants, these nefarious activities often cast a shadow over Web3. It feels as though deception is the rule rather than the exception in this rapidly evolving space.
However, crypto investigators play a crucial role in stopping these threats. Using on-chain analytical tools and a deep understanding of blockchain technology, these individuals, who are often anonymous, work tirelessly to expose fraud, recover stolen assets, and hold bad actors accountable.
In this article, we explore the work of these dedicated crypto investigators and highlight their successes in uncovering fraud within the crypto space.
What Is Cryptocurrency Forensics?
Cryptocurrency forensics, also known as blockchain forensics, is a specialised branch of digital forensics focused on investigating and analysing activities related to digital assets. Using forensic techniques, crypto investigators trace blockchain transactions to identify the flow of funds, uncover connections between hot wallets, and analyse patterns within the blockchain. Expertise in blockchain technology, digital investigation methods, and cryptocurrency protocols is essential for professionals in this field.
The primary goal of cryptocurrency forensics is to track and link digital transactions to the individuals or entities behind them. This investigative approach is key to resolving online fraud, hacking, and other cyber crimes using digital tokens as payment. Beyond criminal cases, cryptocurrency tracing plays a crucial role in civil litigation, regulatory enforcement, bankruptcy proceedings, and asset recovery efforts.
By identifying and locating digital assets, blockchain forensics helps hold perpetrators accountable and supports victims in recovering lost funds.
What Is a Cryptocurrency Investigation?
Conducting a cryptocurrency investigation is an integral part of cryptocurrency forensics, which involves tracking and analysing suspicious activity related to digital tokens and assets. Since these transactions operate on public blockchains, investigators can employ advanced techniques to trace the flow of funds and identify wallet addresses linked to illicit transactions.
By conducting a thorough blockchain investigation, professionals can uncover patterns, connect transactions to individuals or entities, and assist in recovering stolen assets or enforcing legal actions.
The investigation starts by examining blockchain data to locate the address holding illicit funds. Once identified, law enforcement agencies or a cryptocurrency private investigator can take action, such as issuing subpoenas or seizing assets, as seen in notable cases like the Colonial Pipeline ransomware attack.
A crypto crime investigation relies on blockchain analytics tools, forensic expertise, and human intelligence to navigate the intricate web of transactions effectively.
Who Investigates Crypto Crimes?
Crypto investigators, law enforcement agencies, or specialised private firms usually investigate on-chain crimes. These professionals utilise advanced blockchain forensic tools to trace transactions, identify wallet addresses, and uncover the entities behind them.
By combining Open-Source Intelligence (OSINT) with Know Your Customer (KYC) data from approved cryptocurrency exchanges, they link digital wallets to individuals or organisations. Their expertise is essential in various scenarios, including crypto crime investigation, asset theft, internet fraud, and cybercrime cases.
Prominent Crypto Investigators
1. ZachXBT
ZachXBT is a pseudonymous crypto investigator celebrated for his incisive blockchain forensics and relentless pursuit of fraudsters in the cryptocurrency space.
After identifying his first NFT scam in May 2021, ZachXBT has used his expertise in blockchain forensics to conduct crypto crime investigations on potential rug pulls, fraudulent NFT projects, and pump-and-dump schemes.
His X/Twitter account boasts over 600,000 followers, and his crypto investigation includes detailed evidence of misdeeds, instilling accountability and transparency in the crypto ecosystem.
ZachXBT operates independently, and has been instrumental in unmasking unethical practices and assisting victims, recovering over $210 million in stolen assets through his efforts.
His most notable crypto crime investigations include exposing the misuse of funds in the Pixelmon NFT project, where developers funnelled minting proceeds into personal purchases, and unveiling the slow rug pull by Rogue Society.
Funded primarily through crypto donations, ZachXBT is an exemplary individual who keeps the crypto space in check, championing justice in the decentralised space where hacks and scams are often the norm.
2. Coffeezilla
Coffeezilla is an American YouTuber and citizen journalist who conducts crypto crime investigations into scams and fraudulent schemes in the Web3 space.
His YouTube channel initially focused on debunking multi-level marketing schemes and online gurus promising quick wealth. Over time, his work evolved to investigate larger frauds in the decentralised finance (DeFi) ecosystem.
The crypto investigator employs detailed research and blockchain investigations to uncover scams, educating his audience on potential risks while holding influencers and projects accountable. His confrontational yet fact-driven approach made him a prominent figure in crypto investigations, earning him widespread respect from his supporters.
At the same time, this painted a target on his back, and he faced threats of legal action and public doxxing. Coffeezilla’s work has uncovered several high-profile scams, most notably his role in exposing the flaws in Logan Paul’s CryptoZoo project, and interviewing Sam Bankman-Fried (SBF) following the collapse of FTX.
His confrontation with SBF on Twitter Spaces provided significant evidence of mismanagement, preceding the founder’s arrest on fraud charges. Additionally, his criticism of CryptoZoo and allegations of market manipulation plus lack of functionality, led to Logan Paul issuing public apologies while promising investor refunds.
Motivated by personal experiences with deceptive practices, Coffeezilla’s dedication to exposing fraud within the crypto community makes him one of the industry’s influential watchdogs.
3. Spreekaway
Spreekaway is an independent crypto investigator and consultant who’s known for providing real-time insights into major on-chain incidents. Despite maintaining anonymity, Spreekaway has established a reputation as a trusted voice in crypto investigations.
They were most notably amongst the first to uncover the Nomad bridge hack, identifying and alerting the community about major exploits through their blockchain forensics efforts. Spreekaway’s X/Twitter feed acts as a valuable resource for accurate, live analyses of hacks and scams.
Spreekaway’s crypto crime investigations exposed significant vulnerabilities and exploits across various platforms. Their blockchain investigations covered the malicious Audius governance proposal that led to a loss of $6.1 million from the platform, the misused price oracle in Abracadabra’s MIM protocol, and the sale of 9 million SYN tokens linked to Nima Capital’s alleged breach of Synapse DAO’s liquidity agreement.
Their analysis of the $3.3 million Socket protocol exploit showcased their ability to provide actionable recommendations, such as advising users to revoke token approvals tied to compromised addresses. Spreekaway’s meticulous investigations and timely updates underscore their commitment to making the crypto space a safer place for the community.
4. Deebs DeFi
A relatively new entrant to the blockchain forensics niche, Deebs DeFi has been sharing suspicious activities by several projects and influencers in the crypto space since October 2024.
Before stepping on the path of crypto investigations, Deebs DeFi was primarily focused on identifying airdrops and offering insights into promising projects. His tweets show a keen interest in maximising opportunities for DeFi users which encouraged users to share excitement around such opportunities.
He also engaged heavily in conversations about DeFi’s broader landscape, touching on projects like Render, StripChain, and Pendle.
The tone of his tweets shifted significantly when he started speaking up about potential fraudulent practices amongst certain crypto influencers. His crypto investigation into accounts like Pepesso, CryptoNobler, and 0xFinish turned up evidence of fake trading claims plus manipulation of wallet numbers to boost engagement on their channels.
While Deebs DeFi only recently started their blockchain forensics efforts, the ability to investigate and expose fraudulent content by crypto influencers makes us positive about them being another crypto investigator who’s bringing accountability to the crypto space.
Did we miss any other crypto investigators who are doing good work in the Web3 space? Feel free to let us know in the comments!
