Overview
Merkle Science, a leading predictive crypto risk intelligence platform, partnered with the Polkadot Anti-Scam Team, a decentralized community-driven initiative funded by the Polkadot Treasury. The collaboration aimed to enhance the team’s capabilities in combating scams within the Polkadot ecosystem by providing advanced tools for tracing stolen funds, identifying scam clusters, and supporting investigations across multiple chains.
About the Polkadot Anti-Scam Team
The Polkadot Anti-Scam Team is a decentralized, community-driven initiative funded by the Polkadot Treasury. The team works tirelessly to combat scams in the Polkadot ecosystem by detecting and taking down phishing websites and fake social media profiles, creating educational materials for users, reviewing and assessing projects, and providing support to scam victims. Their overarching mission is to protect users, enhance trust, and promote security across the Polkadot ecosystem.
The Challenge
The Polkadot Anti-Scam Team faced significant challenges in combating the increasing sophistication of scams targeting their ecosystem:
- Complex Fund Tracing: Scammers frequently used large numbers of intermediary addresses and bridged funds across multiple chains, making manual fund tracing a daunting and inefficient task.
- Lack of Polkadot-Specific Tools: Many blockchain analytics tools lacked support for Polkadot, limiting the team’s ability to conduct thorough investigations.
The Solution
The Polkadot Anti-Scam Team turned to Merkle Science’s Tracker for its robust capabilities in:
- On-Chain Visualization: Providing clear and detailed visualizations of fund flows, enabling the team to quickly identify relationships between addresses.
- Multi-Chain Support: Supporting Polkadot and other blockchains, ensuring comprehensive investigation capabilities.
- Efficient Address Clustering: Allowing investigators to group related addresses, which is critical when tracking funds laundered through multiple addresses and chains.
Impact and Results
- Streamlined Investigations:
- Using Merkle Science Tracker, the team identified a large cluster of Ethereum addresses associated with scam decentralized applications (DApps) targeting users of a Polkadot-first mobile wallet. This discovery confirmed that these DApps were operated by a single group of scammers. As a result, all related addresses were reported, and some stolen funds were frozen by custodial exchanges.
- In another investigation, Tracker helped identify that an attacker laundered stolen funds using a single swap service with dozens of deposit addresses. The tool confirmed their association in one click, allowing the team to contact the swap service quickly.
- Address Reporting:
- In 2024 alone, the team reported approximately 515 scam-related addresses. Although they do not facilitate fund recovery directly, their detailed reports have led to frozen funds and facilitated victim communication with exchanges and authorities.
- Building Trust in Polkadot:
- The Polkadot community understands the importance of having crypto compliance and investigation tools in place. This support helps businesses feel more secure about adopting Polkadot.
How Merkle Science Simplifies Reporting and Collaboration
Merkle Science Tracker plays a pivotal role in the team’s investigative workflow:
- The tool enables quick identification of addresses involved in scams and pinpoints exchanges that received stolen funds.
- The team uses the Crypto Defenders Alliance (CDA) as a key communication channel to report these addresses and engage with exchanges. For exchanges that are CDA members, direct outreach through CDA channels has proven successful. Unfortunately, communication with non-CDA exchanges remains a challenge due to the team’s lack of legal authority.
By integrating Merkle Science Tracker into their workflow, the Polkadot Anti-Scam Team has enhanced their ability to fight scams and protect their ecosystem. The tool’s powerful visualization and multi-chain tracking capabilities streamline investigations, enabling faster reporting and more effective action against scammers.
The collaboration underscores the importance of leveraging cutting-edge technology to address the evolving threats in the blockchain space. As the Polkadot Anti-Scam Team continues its mission, Merkle Science remains a key partner in their fight to safeguard users and foster trust in the Polkadot ecosystem.
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