What exactly is web3 OSINT? How do internet sleuths chase bad guys on-chain? Is it possible to follow funds to the user’s bank account? Can blockchain clues provide the solution to financial mysteries originating from places like Bitcoin and Ethereum? Unraveling financial mysteries often takes time and dedication, and OnChain Industries represents the latest toolkit available to assist with the challenge.

Web3: The User-Owned Internet

It started with the kilobyte. It took us to social media empires. Now, entire financial systems depend upon it. Where other networks provided the bedrock for the systems and network layers that undergird the simpler nature of the Bitcoin blockchain, “Web3” refers to the true nature of decentralization sought by protocols hoping they might one day distribute their risk so efficiently that nothing barring nuclear apocalypse could end the network, and destroy the financial records. Put more simply: Bitcoin, and other crypto-asset networks, intend to outlast your government’s money, and using it amounts to a bet that the internet will live longer than paper money.

Web3 in Layman’s Terms: What Makes It Different from Web2 Internet?

Web3, put more simply, represents a blockchain-based internet, encompassing and integrating online systems such as cryptocurrency payment networks, non-fungible tokens (NFTs), smart contracts, and other blockchain-based (or database-distributed) systems. 

Web3 data is often spread across the network, unlike in Web2 where one singular organization or company holds your data, and if their network is attacked, all of the user's information is at risk. 

The primary differentiator driving Web3  involves complex libertarian political principles: you (the user) having full control of your data instead of the company owning it; governance decisions being made not by monopolies  but instead by the people who use the internet. This unique technology aims to make financial tools more fair and transparent to virtually everyone.

Web3 OSINT: The Fusion of Finance & Immutability

OSINT revolves around connecting the dots that are hidden in plain sight. Publicly accessible data holds infinite value in today’s world, with sourcing patterns from social media trends, academic journals, websites, more besides bearing much investigative fruit. Web3 OSINT facilitates not only bridging complex financial transactions across permissionless digital networks, but the answering of difficult technical questions about blockchain fund movements, and how they may connect to illicit activities.

Web3 OSINT deals with identifying, analysing, and utilising data that is on the blockchain. Embodying wide scopes of data that are available throughout the diversity of crypto-asset networks, Web3 OSINT researchers connect the behaviors of actors on-chain with their other behaviors on the internet-at-large.

Raw on-chain data can be turned into actionable intelligence in short order. The verifiable veracity of the blockchain’s transactions, along with their degree of permanence, ensures a veritable treasure trove of data remains forever accessible: a source of a common truth in a chaotic universe.

Through a combination of Web3 OSINT, monitoring global trends, cross-referencing sources, and accessing credible data, identifying financial criminals becomes trivial. Though blockchain  also enhances security, accountability through transparency, and decision-making, it remains a challenging pursuit to associate particular wallets and currency collections with a specific internet malcontent.

Blockchain Investigation: Chasing Illicit Funds Online

Despite the transparent and vast amounts of data currently available within Web3, experts continue to develop innovative investigative techniques. These techniques encompass tracking the movement of digital assets by analyzing blockchain transactions, leveraging blockchain ledger databases containing millions of transactions to ultimately discover patterns and uncover illicit activities such as fraud and various other criminal endeavors.

The rise of cryptocurrency asset networks has provided cybercriminals some novel, sophisticated ways to conceal their activities, remain anonymous and presenta major challenge to law enforcement. 

In September 2024, the United Nations Office on Drugs and Crime (UNODC) and the National Police of France conducted a training program, demonstrating the usage of OSINT and blockchain analysis in tackling the crypto-facilitated drug trafficking in Mozambique. This program equipped law enforcement with knowledge of OSINT and enhanced their skills in tracking illegal transactions on the blockchain. The usage of OSINT techniques trivializes the tracing necessary to connect illicit money to the transactions on-chain.

Blockchain Analysis: Evolving Over Time

The 2021 to 2023 cycle represented a cryptocurrency bear run, which ended in 2024. The billions in lost cryptocurrency observed throughout 2024 represents a significant increase in cyberattacks on crypto-asset investors and users.

Blockchain analysis represents the ONLY effective means by which to follow funds travelling across cryptocurrency asset rails. The use of OSINT enables investigators to collate a plethora of data points, connecting the internet activity of a given malicious individual across digital networks (financial or social), and other significant websites.

The use of Web3 OSINT tools like OnChain Industries can accelerate the process of investigation because it gives researchers information about a certain wallet address, email address, or username which may engender connections to one or more cryptocurrency platforms.

On-Chain Analysis

While similar to blockchain analysis, on-chain analysis refers exclusively to data obtained or recorded upon one or more transparent digital financial ledgers…

Where blockchain analysis generally gets utilized to examine the on- and off-chain behaviors of a protocol or business in concert, on-chain analysis focuses explicitly on the actual activity occurring on the blockchain: market manipulation, malicious phishing, or other indicators of fraud may all be spotted in this manner.

OSINT on the BlockChain

Investigating individuals on the blockchain often requires the use of specific types of blockchain scanners (or explorers) in the vein of Etherscan, BlockCypher, and Tokenview. As all blockchains are entirely public, and record specific types of financial transactions as they occur in real time, a key component of blockchain’s financial appeal remains the provable, transparent nature of blockchain account entries.

Can Blockchain Explorers Help?

With blockchain explorers, users can access and examine data stored on the blockchain. Functioning as both search engine and database, it provides real-time access to detailed information about wallet addresses, smart contracts, cryptocurrency movement, and the sum total of a wallet’s on-chain activity.