Data mining for detecting Bitcoin Ponzi schemes

Soon after its introduction in 2009, Bitcoin has been adopted by cyber-criminals, which rely on its pseudonymity to implement virtually untraceable scams. One of the typical scams that operate on Bitcoin are the so-called Ponzi schemes. These are fraudulent investments which repay users with the funds invested by new users that join the scheme, and implode when it is no longer possible to find new investments. Despite being illegal in many countries, Ponzi schemes are now proliferating on Bitcoin, and they keep alluring new victims, who are plundered of millions of dollars. We apply data mining techniques to detect Bitcoin addresses related to Ponzi schemes. Our starting point is a dataset of features of real-world Ponzi schemes, that we construct by analysing, on the Bitcoin blockchain, the transactions used to perform the scams. We use this dataset to experiment with various machine learning algorithms, and we assess their effectiveness through standard validation protocols and performance metrics. The best of the classifiers we have experimented can identify most of the Ponzi schemes in the dataset, with a low number of false positives

Sustainable Development Report: Blockchain, the Web3 & the SDGs

This is an output paper of the applied research that was conducted between July 2018 - October 2019 funded by the Austrian Development Agency (ADA) and conducted by the Research Institute for Cryptoeconomics at the Vienna University of Economics and Business and RCE Vienna (Regional Centre of Expertise on Education for Sustainable Development).Series: Working Paper Series / Institute for Cryptoeconomics / Interdisciplinary Researc

Sustainable Development Report: Blockchain, the Web3 & the SDGs

This is an output paper of the applied research that was conducted between July 2018 - October 2019 funded by the Austrian Development Agency (ADA) and conducted by the Research Institute for Cryptoeconomics at the Vienna University of Economics and Business and RCE Vienna (Regional Centre of Expertise on Education for Sustainable Development).Series: Working Paper Series / Institute for Cryptoeconomics / Interdisciplinary Researc

Comparative analysis of Latvian and Estonian AML requirements in regards to the virtual currency exchange service providers – theory and practice

Money laundering is considered as one of the most significant types of financial crime. Its magnitude has only increased in the past decade alongside with the development in the technological field. Since the regulatory framework seeks to mitigate threats posed by existing financial instruments, persons willing to initiate these actions still find new ways to proceed with illicit activities. In that regard, this thesis focuses on comprehending regulatory scope and requirements governing virtual currency exchange service providers at the high level (European Union), while further analysis emphasises their implementation in Estonian and Latvian regulatory framework. By comprehending minimum requirements set in respective legal systems, in-depth analysis and further comparison will highlight differences, which arises between regulatory attitudes towards these service providers stemming from both member states of the EU. Since virtual currency as such has been legally defined only by the 5th anti-money laundering directive, the regulatory application remains uncertain, therefore theoretical and practical analysis, thus comparison seeks to comprehend different approaches considered by respective jurisdictions