Meikai: TRON Forensics Tool Suite - Sanctions, Counterterror, Criminal, and Human Trafficking

TRON Hackathon Hackathon Season 6
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Project Name: Meikai
Project Track: Web3
Team Name: KREGER RESEARCH LLC
Team Member(s): 1 - sheldonkreger / sheldonwork
HackerEarth Project Link: https://devpost.com/software/meikai-forensics-tool-suite-illicit-activity-detection
Project Goal: Facilitate investigations into illicit activity on TRON
Project Value:

  • Regardless of market conditions, criminals use crypto to execute payments, launder money, and obfuscate their identity.
  • Criminals also steal crypto through various schemes such as wallet exploits, phishing, and pig butchering.
  • Crimes include tax evasion, weapons proliferation, drug trafficking, human smuggling, human trafficking, and funding of terrorist organizations.
  • The USA and its allies cannot effectively enforce sanctions if adversaries can transfer money via crypto.

TRM’s 2023 “Illicit Crypto Ecosystem Report” declares:

  • “While Bitcoin was the exclusive currency for terrorist financing in 2016, by 2022 it was all but replaced by assets on the TRON blockchain, with 92%.”
  • “TRON (TRX) hosted 45% of all illicit volume, up from 41% in 2022, followed by Ethereum
    at 24% and Bitcoin with 18%.”
  • “Tether (USDT) was the stablecoin with the largest amount of illicit volume, at USD 19.3
    billion. Approximately 1.63% of Tether (USDT) volume was linked by TRM to illicit activity,
    compared to 0.05% of USDC.”

Project Info: [Use the upload button and upload a deck/slides of your project in PDF format.
You may upload this part later but it is advisable to upload it ASAP so the community can learn about your project early]
Project Website: [URL to access your project publicly. You will need to submit a working project for the judges and community to try out]
Project Test Instructions: [Please describe and provide step-by-step instructions on how the judges and the community can test out your project]
Project Details: [Details of your project. Feel free to add any photo or video reference]
Smart Contract links: [Link to smart contracts if applicable. Can either be on TRON/BTTC testnet or mainnet]
Project Milestones:

  • Data ingest to Clickhouse and InfluxDB (completed 04/15)
  • Analytical dashboards for Tether data on TRON mainnet (expected 04/31)
  • Deployment to production environment (Project deadline)
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Hey guys, glad to see you here!
Hope to see more details on project soon

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Welcome to Tron hackathon season 6.

So from my understanding, your project is aimed at being the FBI of tron ecosystem.

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is this realistic? ain’t you biting more than you can chew. I will love to hear more on this.

this is one thing even Satoshi fears lol, day in and day out people’s wallet get drained. So if you can provide tools to assist in investigation, it will be a huge project and an achievement. Do we have such a project in existence?

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Welcome to Grand hackathon season 6
I am trying to understand your submission fully well,…if I am not mistaking your mission is to investigate illicit activities on Tron , do you think you have the capability and tools to do it perfectly without seeing white and call it black
Secondly what inspired your project name “Meikai”

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Welcome to Hackathon Season 6, glad to see an entry in the Web3 track. Providing a forensics tool suite for detecting illicit activity on the TRON Blockchain is really one of a kind.

What measures does the project take to stay up with the ever-changing tactics used by cryptocurrency criminals?

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Tracking down criminal would take plenty work

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Welcome to season 6, the statement mentions “pig butchering” scams. Can you elaborate on how this scheme works to steal crypto?

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Hello everybody,
I have been doing a lot of research about how investigators inspect blockchain data for illicit activity. Since I am a solo team, and my specialization is data systems architecture, I was able to ingest the data into some great databases very quickly. However, the challenge for me is understanding the “data science” side of things. So, there is a lot of “invisible work” going on - watching presentations, lectures, and listening to podcasts from people who ARE data scientists. This is giving me several great ideas for the dashboards and the overall user experience.

I will take some time to address everybody’s messages now, thanks for your support. I am glad you are curious!

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Although this tool could be useful to the FBI, my aim is to be a neutral data services company who supports a variety of customers. The “three letter acronym” agencies like FBI, CIA, NSA, etc - all potential clients. However, this kind of tool is also needed by exchanges like Kucoin and Coinbase, who are responsible to providing data to law enforcement.

Private investigators often use blockchain data to track stolen funds after an exploit. This, in fact, was something that happened to a friend of mine who ran an exchange on another chain, recently. They were able to identify the hacker and freeze the funds they had stolen, and negotiate to get most of the money back. Without this kind of insight, their business would have been ruined.

In crypto, we have a very short memory. But, you may recall that much of the industry news in 2023 was surrounding “regulations.” Tools like MeiKai can help blockchain companies - large and small - to prove they are abiding by new laws as they come to fruition.

It should be no surprise that there are already some major players in this space, such as TRM Labs and Chainanalysis.

I know it may sound “evil” to provide services to law enforcement, but you have to consider the alternative. If other chains, aside from TRON, gain an advantage due to regulatory compliance, this would be a big problem. Or, if TRON developed a reputation as the chain that harbors criminals, this would also be very bad. The community benefits from being proactive in this space.

Because I have extensive experience working with blockchain data, I have been able to implement the prototype very rapidly. I am also focusing on a very narrow data set (Tether on TRON), which keeps my costs down. And, since I do not write Javascript, I am using a dashboarding tool rather than writing a custom web application.

In the long run, this project is truly an infinite amount of work. It really needs external data for context. This just isn’t feasible as a solo project in a short timeframe.

There are a handful of large companies like TRM and Chainanalysis, plus some smaller ones. TRM Labs does have tooling for TRON already.

For the prototype I am building, the goal is to provide a useful data analysis tool kit for a person to use. They will need to use individual judgement to determine which kinds of transactions are illicit. In general, there are specific patterns these analysts look for, which allows them to either start a new investigation, or provide evidence for an ongoing investigation. My prototype is designed to automatically detect the most common patterns of illicit activity for a very specific data set - Tether on TRON.

Meikai is the Japanese word for “clarity” - my project will help provide clarity to investigators.

Although it is true that the tactics are changing daily, there are some common patterns that I can focus on for the hackathon. If I have the opportunity to expand this project in the future, I will need to consult more experts to learn about all of the tactics. We can easily adjust the dashboards with new queries as criminals change things up. I won’t use the “AI” buzzword yet. :slight_smile:

It is a lot of work, and there are not enough people/time/money to catch all criminals. A tool like Meikai can make a person much more effective at their job, leading to more prosecutions. Most blockchain criminals get away with it, sadly.

Here is a brief explanation, although you can find better info via ChatGPT or similar tech.
A scammer will contact a victim through social media and build trust with them. They eventually convince the victim to invest in crypto, but they will link them to their scam trading platform. They may continue building trust to encourage the victim to invest even more money before they pull the rug.
I listened to some podcasts explaining how local law enforcement agencies open A LOT of cases like this, but they don’t have the means to investigate and prosecute them.

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Welcome to hackathon season 6

  • How will your project differentiate between legitimate and illicit activity on the TRON blockchain, and are there specific red flags or transaction patterns you’ll be looking for.

  • Will your project focus solely on Tether (USDT) transactions, or will it eventually encompass other TRC- tokens and TRX itself.

  • Given the public nature of blockchains, can you guarantee your system captures all relevant transactions, or might obfuscation techniques like mixers be a blind spots.

  • While the project focuses on near real-time analysis, will there be an option to explore historical illicit activity on TRON for investigative purposes.

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Yes, although I don’t have time to explain in detail. I’d rather work on the app and show you soon :slight_smile:

This early prototype for the hackathon will focus on Tether on TRON, since this is the most common place for illicit activity on all of crypto. (According to TRM Labs). Criminals use stablecoins for obvious reasons, and they choose TRON due to the low transaction fees. I suspect they even run smart contracts on TRON to obfuscate transactions, but I haven’t proven this yet.

The data system is designed to rapidly ingest all data on TRON if my project is successful. I have personally implemented data platforms for Solana, Sui, ETH, and various layer 2 chains, and I intend to expand the data set to be multi-chain. However, this requires preseed funding.

There are several strategies used to obfuscate transactions. Most of the blenders run on BTC. A criminal is likely to blend on BTC and then convert to Tether on TRON to stabilize their price in USD. This is why the project must eventually expand to multiple chains.

Other companies have successfully implemented de-blending systems. It’s another area for expansion.

There are also newer techniques. For example, organized criminals will write custom smart contracts that systematically launder money. I suspect these exist on TRON, but I have not worked with the data enough to say for sure.

The prototype will include all historical transactions for Tether on TRON. I have already loaded this data into Meikai. If I can secure funding, it will scale up to store all historical transactions for all contracts across many blockchains. I have done this at previous companies.

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One question for the TRON team - does my project belong in Web3 track, or another one like Defi? I made my best guess, but we could put it in another category.

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Thanks for sharing this important information, Crypto scams on social media are a real problem, and it’s great that you’re raising awareness.

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Thank you for your response I hope the word clarity will become real soon, wishing you all the best

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This is my first time working with the TRON community. Everybody is being so friendly! Thank you!

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Welcome to hackaTRONs6 ! Meikai forensics tool is really nice and a vast concept. I have heard about these types tools used by many on chain investigators like zachxbt. I am not sure how this is different from blockchain explorers. Do these tools have features like to alert when funds are moved from a hacker’s address? But then again explorers have similar features too. I am curious to see how this tool works. Looking forward to test Meikai. Good luck !

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I think web3 is the right category for this project.

If youare using any specific tools or protocols of TRON/BTTC maybe your project should lie under the integration track

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Hello there, Simbad from trondao here. As per your project description it is ok as web3.

How do you envision Meikai to differentiate from other crypto intelligence firms like Messari?

Keep on building! I encourage to use this hackathon to kickoff your project regardless of obtaining a grant or not :slight_smile: . Follow your passion and sooner or later you will get compensation from your hard work :smiley:

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Thank you for your kind words.

Messari is very nice! I like the variety of information presented there. Messari is catered toward crypto traders and blockchain enthusiasts. It features prices, news, and a lot of techincal info for investors and traders. Things like tokenomics, airdrops, that kind of thing.

Meikai, on the other hand, is strictly focused on uncovering illicit activity. The average crypto user will never have any interested in Meikai. It’s meant for a very specific group of analysts, investigators, and data scientists.

Companies like TRM Labs, Chainanalysis, and Blockchain Intelligence Group offer tools similar to Meikai. However, criminal activity is constantly evolving. Furthermore, blockchain data is a vast world . TRM Labs, for example, offers investigative tools on 21 chains (including TRON). Even though I am working on TRON, there is a lot of space for innovation by modelling, querying, and visualizing the data in different ways.

In fact, several members of the judging pool come from these companies, and they will have to decide if my product is unique or not :slight_smile:

I am aiming to have some dashboards to share by the end of next week.

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