Source of Funds -

Proving legitimate source of funds

Analysis of Money Flow in the Blockchain

Demonstrate to third party’s institutions the legitimate origin of their Cryptocurrency wealth.

Demonstrating a legitimate source of funds for cryptocurrency is crucial in the financial sector, and blockchain forensic investigations play a significant role in achieving this goal.

By scrutinizing the transaction history of a particular address and analyzing the connections between addresses and their transactions, forensic experts can trace the flow of funds and determine their origins.

Financial institutions require this prerequisite to ensure that all funds involved in transactions are lawful and legitimate, which promotes transparency and accountability in financial transactions such as:

Money laundering
Tax evasion
Illegal financing
Cyber-crimes i.e., Ransomware

Cost of proving legitimate source of cryptocurrency funds:

The costs associated with proving the legitimate source of cryptocurrency funds can vary depending on the complexity of the investigation and the expertise of the forensic blockchain investigators involved.

Some of the factors that can affect the cost include:

Expertise:

Analyzing transaction histories and tracing the flow of funds can be a time-consuming process. Blockchain investigations require specialized knowledge and expertise in blockchain technology, understanding legal regulations, AML (Anti-money-laundering), FATF (Financial Action Task Force) and others.

Technology:

Forensic blockchain investigators requires expensive specialized software tools to analyze blockchain data to trace funds.

Legal fees:

In some cases, legal advice and representation may be required to assist with the investigation or to comply with regulatory requirements. Legal fees can add to the overall cost of the investigation.