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- 1 The Ethereum Shanghai upgrade has made criminal detection easy. The placement of illegal assets solution is designed conveniently.
- 2 Ethereum turns into proof of stake blockchain giving it enhanced security.
Ethereum’s recent advancement of turning into proof of stake (PoS) blockchain is an enhanced move in cryptocurrency. By this, it is confirmed that the transaction now depends more on validators. This will give many benefits, making the process faster and energy efficient.
The Ethereum March upgrade which is given the code name ‘Shanghai’ will allow stakers to withdraw their locked ether. In this, important changes are made in the blockchains protocol. The non-upgraded nodes will no longer take part in the staking and validation process. It improves the liquidity to stakers and validators.
The main investments done on Ethereum are through non-fungible tokens (NFTs), decentralized finance (DeFi), bitcoin (BTC), and stablecoins. But, with the upgrade the network has also started offering fixed income assets.
Detecting Criminals on Ethereum Is Easy Compared to TradFi
In traditional finance, productivity is the most important part. The rise and fall of productivity determines the risk to financial assets. The movement regulation is set by the United States Federal Reserve.
The investigators use the trends in the risk free rate to find the unusual movement of funds in the market. This fund flow can be used in money laundering. This risk is managed by automated systems that alerts the institutions. The data scientists design and make models to raise the red flags if any suspicious transactions are done, whereas the crypto focuses on criminal entities instead of criminal activity.
It is found that money laundering happens in 3 stages: placement, layering, and integration. The entering of crime is placement; layering is the difficult movement of funds; and, integration is the involvement of criminals in legal economy
The designing of the solutions in crypto assets is easy because the risks are known. It can be a ransom attack, DeFi hacks, smart contract hacking, and also phishing schemes. In all these crimes, the wallet address is easily available. If the crime is commenced, then, the related wallet is analyzed.
Staking Rewards Make Easy to Detect Criminals
The staking rewards make it easy to detect any suspicious activity. It is very necessary to think like criminals if you want to design the solutions. The trusted approach to expose the activity is to judge the uneven movement of assets.
Shanghai staking yields provide benchmark interest rates for crypto. This allows to form the baseline risk reward structures. With help of this, one can easily spot financial behavior. This upgrade is focused to prevent Ethereum from manipulative activities or any criminal cause. Also, the crypto hacks are going down due to this upgrade.
In brief, there might be some addresses that are taking high risk even after earning below the risk free rate. This type of attention can be used to detect the wash trading on NFTs. To manipulate the price, many participants carry out numerous NFT trades. In the
Forensic Team Need To Increase The Capabilities
DeFi ecosystems are used for movement of large sums of assets through blockchain, the fall of FTX, and to avoid the centralized regulation criminals move to decentralized exchanges. DeFi system detection of insensible asset movements can provide large leads.
To avoid this expanded set of crimes, forensic teams need to increase their capabilities of investigating the unusual flow of funds. The increase in interoperability also demands better systematic surveillance to detect criminal transfers.
The unpredicted nature of cryptocurrency leads to criminal risks. The volatile nature of crypto leads to fixed risk limits ineffective and money laundering remains unnoticed.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
