Search arXiv⌕ Search
Home/Archive/arXiv

arXiv · 2306.06108

Demystifying Fraudulent Transactions and Illicit Nodes in the Bitcoin Network for Financial Forensics

Youssef Elmougy·Ling Liu
View original source ↗Read source document ↗Export metadata ↓

Abstract

Blockchain provides the unique and accountable channel for financial forensics by mining its open and immutable transaction data. A recent surge has been witnessed by training machine learning models with cryptocurrency transaction data for anomaly detection, such as money laundering and other fraudulent activities. This paper presents a holistic applied data science approach to fraud detection in the Bitcoin network with two original contributions. First, we contribute the Elliptic++ dataset, which extends the Elliptic transaction dataset to include over 822k Bitcoin wallet addresses (nodes), each with 56 features, and 1.27M temporal interactions. This enables both the detection of fraudulent transactions and the detection of illicit addresses (actors) in the Bitcoin network by leveraging four types of graph data: (i) the transaction-to-transaction graph, representing the money flow in the Bitcoin network, (ii) the address-to-address interaction graph, capturing the types of transaction flows between Bitcoin addresses, (iii) the address-transaction graph, representing the bi-directional money flow between addresses and transactions (BTC flow from input address to one or more transactions and BTC flow from a transaction to one or more output addresses), and (iv) the user entity graph, capturing clusters of Bitcoin addresses representing unique Bitcoin users. Second, we perform fraud detection tasks on all four graphs by using diverse machine learning algorithms. We show that adding enhanced features from the address-to-address and the address-transaction graphs not only assists in effectively detecting both illicit transactions and illicit addresses, but also assists in gaining in-depth understanding of the root cause of money laundering vulnerabilities in cryptocurrency transactions and the strategies for fraud detection and prevention. Released at github.com/git-disl/EllipticPlusPlus.

Explore related subjects

cs.CRcs.LG

Keep this discovery

Explore connections, maps & timelines

BibTeXRIS

Youssef Elmougy, Ling Liu. 2023-05-25. Demystifying Fraudulent Transactions and Illicit Nodes in the Bitcoin Network for Financial Forensics. https://doi.org/10.1145/3580305.3599803

Cite the original work for its findings. Save a collection to share your selection of sources.

KEEP EXPLORING

Related papers

arXiv2026

MIRANDA: short signatures from a leakage-free full-domain-hash scheme

We present $\mathsf{Miranda}$, the first family of full-domain-hash signatures based on matrix codes. This signature scheme fulfils the paradigm of Gentry, Peikert and Vaikuntanathan ($\mathsf{GPV}$), which gives strong security guarantees. Our trapdoor is very simple and generic: if we propose it with matrix codes, it can actually be instantiated in many other ways since it only involves a subcode of a decodable code (or lattice) in a unique decoding regime of parameters. Though $\mathsf{Miranda}$ signing algorithm relies on a decoding task where there is exactly one solution, there are many possible signatures given a message to sign and we ensure that signatures are not leaking information on their underlying trapdoor by means of a very simple procedure involving the drawing of a small number of uniform bits. In particular $\mathsf{Miranda}$ does not use a rejection sampling procedure which makes its implementation a very simple task contrary to other $\mathsf{GPV}$-like signatures schemes such as $\mathsf{Falcon}$ or even $\mathsf{Wave}$. We instantiate $\mathsf{Miranda}$ with the famous family of Gabidulin codes represented as spaces of matrices and we study thoroughly its security (in the EUF-CMA security model). For~$128$ bits of classical security, the signature sizes are as low as~$90$ bytes and the public key sizes are in the order of~$2.6$ megabytes.

cs.CR↗
arXiv2026

SteganoBackdoor: Evading Data-Poisoning Defenses via Steganographic Backdoors

Transformer-based models are highly susceptible to backdoor attacks via supervised fine-tuning (SFT). To red-team existing data-poisoning defenses, prior work has increasingly focused on stylized triggers, synthetic artifacts, and token-level perturbations designed to evade detection. However, this trend has shifted threat models away from naturally occurring semantic triggers and realistic low-budget poisoning settings. Addressing this gap, we introduce SteganoBackdoor, an optimization-based framework that transforms semantic-trigger seeds through autoregressive token replacement, sequentially minimizing embedding overlap with the inference-time trigger while preserving a strong per-sample training-time payload. The resulting SteganoPoisons maintain linguistic fluency and encode the payload across ordinary tokens, such that no individual token carries a concentrated signal and the full payload instead emerges from their exact combination and ordering. Across 18 encoder-based and decoder-only models spanning 120M to 14B parameters, SteganoBackdoor achieves high attack success under sub-percent poisoning budgets and exposes limitations in existing data-poisoning defenses.

cs.CR↗
arXiv2026

Foundations and Design Principles of Lightweight Cryptography for IoT Systems

The successful deployment of the Internet of Things (IoT) applications relies heavily on their robust security, and lightweight cryptography is considered an emerging solution in this context. While existing surveys have been examining lightweight cryptographic techniques from the perspective of hardware and software implementations or performance evaluation, there is a significant gap in addressing different security aspects, such as design principles, specific to the IoT environment. This study aims to bridge this gap. This research presents an examination with focusing on the security evaluation of symmetric lightweight ciphers commonly used in IoT systems. The objective of this study is to provide a concise overview of lightweight ciphers with emphasizing on their security challenges which is an essential consideration for real-time and resource-constrained applications.

cs.CR↗