Tracking dirty money across blockchains

The existing tools used by exchanges and regulators are relatively clumsy in tracking this activity, but University of Birmingham Associate Professor Pascal Berrang and PhD student Endong Liu are developing a system called SynapTrack that promises greater accuracy.

The project began as a research exercise looking at how effective US sanctions were on preventing use of an Ethereum “mixer”, a privacy tool that had been blacklisted for facilitating money laundering.

To answer the question, Dr Berrang’s group built a state-of-the-art tracing method for Ethereum and other Ethereum compatible blockchains. The team developed an algorithm to examine transactions involving the sanctioned mixer and published a paper showing that the sanctions were not working effectively.

That finding exposed an uncomfortable truth: few existing anti-money laundering tools were working well. Dr Berrang and Mr Liu’s algorithm, however, appeared to produce better results. Unlike many existing systems, which tend to treat each transaction as either clean or dirty, their approach is explicitly quantitative. If an account contains both legitimate and tainted funds, and only part of the balance is moved, the system attributes risk proportionally.

That fine-grained scoring underpins SynapTrack’s ambition to cut false positives – a major operational headache for compliance teams, who currently spend time untangling large volumes of benign alerts. The system has already been tested on real-world data from the 2025 Bybit hack, where $1.5 billion in tokens were stolen. In trials, SynapTrack traced the hacker’s transactions with 98 per cent accuracy, says Dr Berrang.

The technology also looks at the full history of the blockchain and, most crucially, tracks cross-chain activity. Moving assets between blockchains has become a routine tactic for criminals seeking to lose investigators in the gaps between ledgers, and is a key pain-point for financial investigators. “We focused our demo on exactly this point, showcasing that we are able to track funds that leave one blockchain and enter another one,” says Dr Berrang.

The technology has clear commercial potential. Cryptocurrency exchanges must screen all incoming funds under anti‑money laundering regulations. Regulators and law enforcement agencies need tools for deep, incident-driven investigations. Decentralised finance platforms, though structurally different, also face mounting pressure to demonstrate control. “We think that there are several possible customer bases: exchanges, regulators and investigators and lastly decentralised finance,” says Dr Berrang.

The route from academic paper to commercial product has been facilitated by Enterprise and Innovate UK’s CyberASAP, an accelerator programme that helps academic researchers commercialise early-stage cybersecurity concepts. Dr Berrang and Mr Liu entered the CyberASAP scheme with University of Birmingham Enterprise as the mandatory university partner.

The Enterprise team also helped with market research and validation as well as arranging conversations with potential customers. “They organised, for example, us talking to the US Securities and Exchange Commission, and they helped in refining the pitch and preparing documents,” says Dr Berrang.

This support has meant Dr Berrang and Mr Liu have been able to move forward on commercialisation without losing focus on the underlying science. Enterprise is putting the team forward for UKRI grant funding to allow for further development, such as looking at how to incorporate artificial intelligence into the product. It has also funded an external adviser to help the team decide whether to spin the technology out as a company or license the technology to another business.

If they do take the spin-out route, Mr Liu says the accelerator programme has given them useful training in entrepreneurship. “It can give me opportunities to build my own company in the future because CyberASAP has a lot of training on how to commercialise, how to evaluate the market size and to know your unique selling points,” he says.