As cryptocurrencies continue to attract both investors and criminals, the fight against crypto scams is entering a new phase of complexity. Crystal Intelligence, a blockchain analytics firm, is at the forefront of this battle, leveraging advanced technology to help businesses, law enforcement, and regulators identify and stop illicit activities in the crypto space.
According to Crystal Intelligence’s lead investigator Andrii Sovershennyi and senior investigator Federico Paesano, scams have evolved far beyond simple schemes, morphing into sophisticated operations that exploit emerging blockchain products and services. In an in-depth interview, the investigators detailed how criminals adapt to tighter regulations and what tools can help protect users in this rapidly changing landscape.
Criminals Turn to DeFi and Cross-Chain Swaps
Paesano explained that, in the early days, scammers relied on basic techniques such as sending Bitcoin through multiple addresses to cash out anonymously. But as centralised exchanges adopted stricter Know Your Customer (KYC) policies and began cooperating more closely with law enforcement, these methods became less effective.
“Today, criminals exploit decentralised finance (DeFi) protocols, token bridges, and swaps,” Paesano noted. “They use these technologies to move funds across multiple blockchains without passing through centralised exchanges that would normally require identity checks.” This makes it far more challenging for investigators to track stolen assets or illegal proceeds.
Real-Time Analytics Critical to Stopping Scams
Crystal Intelligence’s real-time blockchain analytics can mean the difference between halting a scam or watching funds vanish. Paesano described how the firm’s tools allow suspicious addresses to be labelled quickly, alerting exchanges before criminals can cash out.
“For example, if stolen funds arrive at an exchange, our alerts notify compliance teams immediately,” he said. “This fast response can delay or stop criminals from accessing or laundering the money further.”
Sovershennyi emphasised the importance of speed: “Blockchain transactions confirm quickly. An attacker can receive and convert funds before anyone realises what’s happening. Acting within minutes is essential.”
Helping Law Enforcement Trace Digital Trails
Crystal Intelligence supports law enforcement agencies worldwide by offering tools designed for simplicity and clarity, making complex crypto transaction patterns easier to interpret. Clear visualisations help investigators follow the flow of funds and identify links between addresses, transactions, and known entities.
“The reliability of our data is critical,” Paesano said. “We work hard to verify attribution so law enforcement can trust our analysis when freezing assets or pursuing investigations.”
Crystal’s expertise has proven essential in cases where stolen funds were quickly moved across dozens of wallets to hide their origin. By tracing these transactions and notifying exchanges, Crystal has helped law enforcement recover assets or block illicit withdrawals.
The Challenges of Blockchain Transparency
Despite blockchain’s reputation for transparency, scams still thrive. According to Sovershennyi, the speed of crypto transactions is a major obstacle: “Victims often realise they’ve been defrauded too late, and the stolen funds are already beyond reach. Raising awareness about common scams and supporting reputable businesses is essential.”
He also noted the rise of social engineering tactics combined with AI tools, such as deepfake videos or fake customer service agents, which can trick even savvy investors.
Regulations and Standards: The Next Frontier
Looking ahead, Sovershennyi predicted a shift towards stronger regulations and accountability. “I believe security focus will move from technology alone to include clear laws and regulatory requirements,” he said. “Services will need to prove they take security seriously, and specific rules may emerge around how exchanges and custodians handle assets.”
For businesses, he recommended following the Cryptocurrency Security Standard (CCSS) to implement robust security policies. For consumers, he urged using licenced and regulated exchanges rather than unverified platforms and checking official lists of authorised firms maintained by national financial regulators.
Empowering Users Through Education
Crystal Intelligence encourages users to visit reputable resources such as the International Organisation of Securities Commissions (IOSCO) website for investor protection advice and scam warnings. Their own website also provides extensive guides to help businesses and individuals understand crypto security and respond to scams.
As criminals continue to innovate, the combined power of real-time analytics, regulatory oversight, and informed users will be crucial in safeguarding the future of cryptocurrencies. Crystal Intelligence’s work underscores that while crypto scams are becoming more sophisticated, the tools and strategies to fight them are advancing just as quickly.
