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Abstract: Bitcoin and cryptocurrency adoption has increased significantly over the past few years. The significant growth in the industry has been matched by growth of crimes in this domain; not only in scams and dark-web illegal trading, but also in white-collar crimes with fraud and perjury occurring increasingly. With blockchain technology, the world of financial infidelity has become increasingly sophisticated. There is a common belief that blockchain and cryptocurrency provide means of hiding funds from the public or close associates who may not be familiar with the technology. The rise of cryptocurrency has also led to spouses hiding digital assets during divorce settlements. This study presents a use case of a couple in the midst of a divorce where one of the spouses was accused of perjury for failure to declare bitcoin holdings, obtained via Bitcoin mining, and possibly other forms of cryptocurrency and digital assets to the court. The plaintiff is entitled to fifty percent of all assets. While property, stocks, bonds, and bank accounts can easily be traced, cryptocurrency assets are more complex to trace but it is not impossible. This paper illustrates how such a case can be investigated by following the flow of funds on the blockchain, using tools such as Maltego and QLUE. The paper thus presents an investigative process that can be followed for a new category of forensic investigation.
Keywords: Bitcoin, Blockchain, Fraud, Investigation, Perjury
1. Introduction
Bitcoin (BTC), the most popular cryptocurrency on the blockchain with the highest market capital (CoinMarketCap, 2023), has gained wide popularity since it was first created, due to its unique properties, turbulent price swings and surging value. Some may believe bitcoin gives back the power to the people because transactions can be performed without third parties such as banks. However, the popularity of cryptocurrency has attracted various types of fraud and crimes and has become a growing global concern (Trozze, et al., 2022) (Botha, Botha, & Leenen, 2023). Crime in the cryptocurrency space is increasingly moving into the white-collar crime category. Organised criminal groups need some way to "cash out" in ways to evade law enforcement (Gibson Miralis, 2023). The growth of cryptocurrency has also led to cases where spouses hide digital assets during divorce settlements. When a couple, married in...