AI in Crypto: How Generative AI Agents Will 'Solve Crime' in the Upcoming Years

AI in Crypto: How Generative AI Agents Will 'Solve Crime' in the Upcoming Years

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by Giorgi Kostiuk

2 years ago

Made with AI

  1. AI Against Crypto Crimes
  2. Exceptions for Tax Dodgers
  3. Challenges with Privacy Coins

    4. According to the CEO of Chainalysis, using artificial intelligence to analyze the blockchain and solve crimes will become the norm in the next five years. Michael Gronager shared his predictions on this topic at the Token2049 conference in Singapore.

    AI Against Crypto Crimes

    Asked whether generative AI could help with blockchain investigations within three to five years, Michael Gronager replied, 'It's not much further away.' He noted that cryptocurrency would become the primary tool for solving crimes due to its scalability, transparency, and international application. Automating investigations with AI would be more efficient than deploying numerous government agents, as it would prevent overlapping efforts among different departments.

    Exceptions for Tax Dodgers

    AI agents could identify tax evaders, but those who cashed out of crypto transactions five years ago or more will likely avoid detection. Gronager noted, 'There's a likelihood that you didn't end up paying your tax not because you didn't want to, but because you didn't know how.' However, with the advancement of software tools and crypto tax lawyers, such excuses will no longer be accepted. In the United States, the IRS and other tax departments are already using AI to track potential tax evaders.

    Challenges with Privacy Coins

    Gronager pointed out that crypto mixer protocols and privacy tokens like Monero significantly complicate AI's task of tracking criminals. However, the share of privacy transactions constitutes less than 1% of all crypto transactions. Despite an increase in crypto crime, the growth of privacy coins has not followed the general trend.

    According to a Chainalysis report, nearly $100 billion has been transferred from known illicit wallets to crypto exchanges or alternative services since 2019. Research indicates that crypto mixers and privacy coins hinder AI efforts in combating crimes, but their use remains marginal.

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