Digital Asset Transaction Flow: Anonymous but Not Invisible

Money flows on the blockchain are often thought to be anonymous, but the reality is that every transaction leaves a trace and is fully traceable thanks to modern analytical technologies.

Vietnam currently has about 17 million people owning digital assets, most of whom are young people - Photo: QUANG DINH

In many attacks targeting the blockchain industry or large-scale fraud campaigns, many cybersecurity companies in Vietnam have directly participated in supporting investigations and handling, contributing to clarifying criminal acts in the digital space.

Identity is still traceable even though transactions are anonymous

Speaking to Tuoi Tre , Mr. Ngo Minh Hieu, Director of the Anti-Fraud Organization, said that many people think it is very difficult to trace the flow of money related to crypto assets, but the reality is completely opposite. All blockchain transactions are recorded publicly, transparently and cannot be edited.

Investigators and on-chain analytics platforms can fully track the flow of money, even when criminals use multiple intermediary wallets to launder money."

Some recent incidents, such as the dispute involving Shark Binh's digital wallet - show that the community still has misunderstandings about transaction traceability.

Once the money left the AntEx master wallet, went through personal wallets and was converted into cash, many thought it was almost impossible to find the culprit behind it. But subsequent developments have shown otherwise.

"Tracking digital assets is not as difficult as people think, it only requires complete data and the right tools. Compared to many other areas of investigation, tracing cryptocurrencies is clearer because all traces are on the chain," Mr. Hieu said, adding that on the blockchain, each wallet is represented by a unique string of cryptographic characters.

All wallet transactions are public, allowing anyone to track the flow of funds between addresses.

However, to convert digital assets into fiat money - i.e. "real money" - the flow of money needs to go through centralized exchanges (CEX). Here, users are required to perform identity verification (KYC). This is the "bridge" between the pseudo- world of blockchain and the traditional financial system.

According to Mr. Hieu, the flow of digital currency on the blockchain is traced by tracking all transactions transferred from one wallet to another, because all data is recorded publicly and cannot be deleted.

As coins pass through intermediary wallets, exchanges, or mixing services, on-chain analytics follow the trail to determine the final destination and associated addresses.

The growth of the crypto market has led to an increased demand for digital asset investigation services. In Vietnam, many professional companies have appeared in this field and even have international reputation.

"This is a profession that tends to develop strongly. Most of the personnel entering the profession come from the field of cyber security, because there are no formal schools that train in this major," said an expert.

Difficulties in tracing digital money flows

According to experts, the biggest difficulty in tracing digital money flows is not in the technology, but in the "identification" stage - that is, determining who is behind each wallet address. Usually, criminals use multiple layers of wallets, foreign exchanges that do not perform KYC, or use coin mixing services to hide.

However, when combining blockchain data with data from exchanges, IPs, transaction behavior..., authorities can still isolate and track down the subject.

Dr. Ngo Tan Vu Khanh, Country Director of Kaspersky Vietnam, also affirmed that digital assets can be completely traced. Accordingly, cryptocurrencies such as Bitcoin, ETH, USDT or projects operating on transparent and public blockchains record the entire transaction history on the blockchain.

This allows authorities and analysis units to track and trace cash flows when necessary. However, according to Mr. Khanh, there are still groups of "private coins" such as Monero, Dash or Zcash, which are designed with a very high level of anonymity, making tracing extremely difficult, even almost impossible.

These projects actively remove or hide all transaction metadata, do not publicize sender or recipient addresses, do not display transaction amounts, and do not allow blockchain analysis.

"Each transaction is completely isolated, not linked to the previous or next transaction, creating a layer of almost absolute security," said Mr. Khanh.

Meanwhile, according to Ms. Jenny Nguyen - Chief Operating Officer (COO) of Kyros Ventures, tracing cash flow smoothly requires the highest cooperation from the exchanges.

However, international exchanges have their own operating principles and compliance policies, especially regarding data protection and user privacy, which is one of the difficulties in tracing digital asset flows.

According to Mr. Tran Xuan Tien - General Secretary of the Blockchain Association of Ho Chi Minh City, the basic principle of blockchain is that users can verify it themselves. Users have full control over their digital assets, which is called decentralization, which creates trust in blockchain.

"Transparency is the default, so there is no need for any third party to have access to this data. It is just a matter of synthesizing and analyzing it and presenting it in a more accessible way," said Mr. Tien.

* Mr. Tran Xuan Tien (General Secretary of Ho Chi Minh City Blockchain Association):

Avoid abuse of power and user data infringement

Transaction tracing serves many purposes, from verifying trust, monitoring commitments to tracking criminals. Investors will access tracing data in public information. However, tracking criminals requires KYC information from the exchange, where the information and assets are ultimately stored.

Therefore, criminal information or user information that needs to be provided by the exchange must be requested by the authorities to avoid abuse of user data.

Exchanges around the world have a mechanism to provide user information when there is an investigation request from the court and authorities in accordance with the exchange's regulations. Therefore, tracing in the blockchain is simpler and more reliable than the traditional market.

The blockchain detective profession is growing

Vietnam has millions of users owning cryptocurrencies - Illustration photo AI

According to Mr. Khoa Ho - founder and technology director of BSX exchange, former engineer of Coinbase - one of the first and largest cryptocurrency exchanges in the world, blockchain records all transactions publicly, transparently and uneditably.

"Therefore, with enough data and the right tools, it is still completely possible to trace the money flow, even when the fraudster splits it through many intermediary wallets or uses mixers to hide the traces," said Mr. Khoa Ho, adding that tracing tools like Chainalysis or TRM work in a very interesting way.

They have a team of over 500 experts who constantly tag wallets with the identities and organizations behind them, such as exchanges, hot wallets, cold wallets, hacker groups, mixers, and criminal organizations. When the wallet map is large enough, it is possible to deduce who controls a particular wallet simply by comparing and analyzing statistics.

This makes it possible to trace the flow of money on-chain, and sometimes even faster than the traditional financial system. For example, Coinbase has a team dedicated to analyzing on-chain data to track criminals. Thanks to these teams, many of the world's largest hacks and scams have been detected early and successfully traced.

The difference with digital assets is that to effectively track them, you need the skills to read and analyze data on the blockchain. The data is always available, but not everyone understands how to follow its flow. In addition, professional tools like Chainalysis or TRM are very expensive, so it is not easy for individuals to access them on their own.

Therefore, many independent blockchain detective groups have been formed around the world, working with law enforcement agencies to identify suspicious wallets, reconstruct cash flows and support investigations.

“This is gradually becoming a real profession, but it requires high technical skills and access to specialized toolkits,” said Mr. Khoa Ho.

Defense must be prioritized over "firefighting"

According to experts, although tracking technology is increasingly developed, the nature of the digital asset market still has great potential risks. Therefore, for those who do not have enough knowledge and experience, it is best to consider carefully before participating. If you want to invest, choose assets with reputation, long history and large capitalization.

Ms. Jenny Nguyen said she always relies on three core criteria when evaluating any crypto project before investing.

First is the human factor, because no matter how optimized the technology is, there must always be a real operating team. Therefore, it is necessary to find out who the people behind the project are, their experience, reputation, or whether they have participated in previous successful or failed projects.

"If you don't know who is behind the project, it's best not to invest," said Ms. Jenny Nguyen.

The second criterion is the product. A truly valuable product must be practical and capable of solving a problem that the market needs, instead of just being an exaggerated idea or creating a problem and solving it yourself. Therefore, the story of the product and its true value are things that cannot be ignored in the appraisal process.

Finally, the timing of investment. A good project that appears at the wrong time can also fail as usual. Therefore, according to Ms. Jenny Nguyen, new investors should never "blindly" invest. The crypto market always has opportunities but risks always go hand in hand, so you should avoid following the trend.

Don’t rush into investing without fully understanding the project, and consider your own risk tolerance. Most importantly, you should know how to evaluate information yourself instead of believing in advertisements.

VIRTUE - BINH KHANH

Source: https://tuoitre.vn/dong-tien-giao-dich-tai-san-so-vo-danh-nhung-khong-vo-hinh-20251117224012737.htm