Anti-money laundering software AML Bot stops providing services to illegal crypto activity tracking tool Antinalysis, which is suspected of facilitating money laundering for criminals

According to the announcement of the anti-money laundering software AML Bot, AML Bot has now cut off the third-party service channels of the illegal encryption activity tracking tool Antinalysis and reported Antinalysis's service acquisition address to law enforcement agencies.

Antinalysis is an auxiliary tool that allows criminals in the dark web to generate risk reports on their Bitcoin wallets. The application may have been created by an administrator of a dark web market to help users trade in the dark web market. After being cut off from service by AML Bot, the tool has now been shut down.

AML Bot said in a statement on Monday that it had unknowingly provided Antinalysis with access to its services, "We have conducted an internal investigation and [closed] Antinalysis' account, and we are working on smart measures to prevent such registrations in the future." AML Bot itself is a service provider for Crystal Blockchain, another blockchain analysis tool.

The company also confirmed that it has reported all addresses associated with the use of Antinalysis to law enforcement. This may provide clues that help regulators identify the creators of Antinalysis. Meanwhile, the anonymous technical administrator of Antinalysis (alias pharoah) described the AML Bot crackdown as an "illegal authorization to seize" their data source, which they blamed on media exposure. In a statement to the BBC, they said: "We do not like state agencies conducting large-scale surveillance in the name of national security and criminal investigations."

Antinalysis allows users to check how “clean” a particular Bitcoin is. Once a Bitcoin wallet is linked, the tool will analyze where the Bitcoin in that wallet came from and how risky it is to hold that wallet. The tool categorizes Bitcoin obtained from darknet markets, ransomware, and theft as “extreme risk,” while Bitcoin from exchanges and newly mined Bitcoin are categorized as “risk-free” assets. Such analysis is possible in part because of the transparency inherent in blockchain technology. Blockchains, such as Bitcoin and Ethereum, have an immutable transaction history, making it easy to determine whether a particular cryptocurrency has ever been used for any illegal activity. The tool will raise a red flag when illegal Bitcoin enters a regular platform like Binance or Coinbase. If used for this purpose, a platform can quickly locate the “stolen money” and conduct risk control in a timely manner.

Bitcoins confiscated by the U.S. government are eventually auctioned off, so the “dirty” bitcoins return to circulation. In 2014, venture capitalist Tim Draper bought 30,000 bitcoins confiscated from the dark web market Silk Road for an undisclosed price. But Draper’s bitcoins are presumably innocent in the eyes of detection tools, because they have been processed by the government, so he will not be labeled as a “criminal.”

Based on existing data, the crypto community currently infers that the creator of Antialysis may be one of the developers of Incognito Market, a narcotics market on the dark web, and the technical administrator’s statement also confirmed his connection with Incognito.

Incognito was launched in late 2020 and accepts payments in Bitcoin and the privacy coin Monero. Given that the criminal detection tool has entered the public eye, an AML Bot spokesperson said it could be a sign that criminals are trying to cash out.