Cryptocurrency hacks usually make the news. So do arrests of alleged perpetrators. The recent seizure of around $3.6 billion worth of bitcoin along with the highly publicized arrest of two individuals tied to a 2016 attack on the crypto exchange Bitfinex by federal officials is but one example.
Crypto analytics played a key role in helping federal officials identify the alleged Bitfinex launderers. In another case, blockchain analysis may have helped clear the names of two suspects in an exchange hack.
In November 2020, two Venezuelan software developers, José Manuel Osorio Mendoza and Kelvin Jonathan Diaz, were detained by local authorities under suspicion of stealing around $1 million worth of bitcoin from a local cryptocurrency exchange called Bancar.
Mendoza and Diaz maintained their innocence but remained doubtful they would be able to prove that in court.
“There is a lot of technological ignorance in my country, despite being an economy open to crypto … Even though we worked at a technology enterprise, we felt this doubt about how we could explain something that was so new and so difficult to understand” to a local judge, Mendoza said.
At the time of their detainment, Mendoza and Diaz worked at POSINT, a Venezuelan software development company that had previously provided services to Bancar. Eager to clear his company’s and colleagues’ names, Danny Penagos, chief operations officer at POSINT, hired blockchain analytics company CipherBlade to independently investigate the attack on Bancar.