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  • Writer's pictureIshaan Vats


Ashfaq Khan, Advocate, High Court of Madhya Pradesh


As we, all know that Blockchain technology is a record-keeping platform for digital currency transactions and other purposes too in these days. The technology now does not limit up to here only it is helping the world in better ways like controlling crime related to money transaction and cyber-attack financial and business institutions.

It is now being used by several countries in which the United States and the European Union are working seriously against crimes of money laundering, cyber-attack (theft of data and money) on banks and many financial or business institutions, this is a great concern in today’s technological world.

Through Blockchain technology we are now able to understand or analyze and make a better prediction of criminals' behavior most of the time before it happens in real. Several of the federal agencies are finding ways to counter this problem and the solution has taken out which is there must be a private security system that works on the working of Blockchain/Distributed Public Ledger.

The money laundering problem is increasing day by day, with approximately 5% of global GDP transactions estimated through money laundering. Every year roughly $1 trillion flows occurred illegally. Here Blockchain is used for monitoring the transaction and works for the anti-money laundering transaction monitoring. Because of the Blockchain also known as distributed Public Ledger, which is open source and cannot be compromised or tempered data is safe and protected from any kind of hacking.

Cybercrime is also the most concerning factor/problem and cannot be solved as early as possible and for that Blockchain technology helping the federal agencies to prevent these types of crimes against the individual and society. Hacker groups’ eyes are always on the financial institution and big corporations for stealing money and data. In the recent past, “someone has stolen $81 million from an account of Bangladesh Bank which is the Country’s Central Bank with the Federal Reserve.”[1]

Blockchain Technology A Cyber Security Solution

In the recent past, there is a massive attack on the data of so many institutions like Netflix, Twitter, etc such as “wannaCry ransomware” attack and other attacks such as Bangladesh bank $81 million stolen to prevent these serious attacks against the economy of the country. Blockchain is helping the agencies for monitoring and at this particular moment, it is a better option to prevent these types of activities.

European Union has funded a project of around 5 million euros for preventing criminals and hackers from using blockchain technology for their illegal purposes. This is the “three-year project with 15 members join forces in Investigation of the transaction is underground (Tools for Investigating of Transaction in Underground Markets).” The project includes the International Police Organization Interpol and four law enforcement agencies, its aim is to develop tools for the revelation of characteristics, which are common in a criminal transaction.[2]

Blockchain technology helps to prevent cyber attacks, banks are now creating their own fraud prevention system which is based on the Distribute Ledger technology or Blockchain technology having multiple databases. Now, in today’s world after so many cyber threats and attack there is seriousness among banking companies and other business institutions and they are started exploring their own hybrid systems and this system can work on several levels like – local, regional and global.[3]

The type of System first, maintaining a confidential record of all past transaction but without letting everyone know the details of the transaction unlike blockchain maintain the privacy of legitimate customers. After that, the duty of the system is to update and store all the authenticated credentials and verified receivers and senders. This is some sort of risk management system, which bank is using these days to prevent cyber-attacks.[4]

How And Why Blockchain Technology Prevent Cyber Crime/Attack

  • No Single Point of Failure – There is no single point of failure in blockchain technology and the chances of an IP-based DDoS attack is high decrease.[5] The distributed nature of blockchain technology solves the Byzantine Generals problem of false consensus.[6]

  • Bitcoins are a great example of a successful platform with no cyber-attack in Seven years, even if there is disruption of any of the nodes present in the blockchain network data is easily accessible because data here is saved/stored everywhere in every node this makes hackers weak and their DDoS attack got unsuccessful.[7]

  • Operational Resilience – Because of the distributed nature of the technology any Organization uses the technology for their safety of data and business purposes, even there is an attack on the Blockchain network and the Organization can still work and access its data. However, this does not mean that the network of blockchain is completely full proof, as we know there is the stage known as the pending stage of the transaction request in the blockchain network and during this pendency data can be and forged. In 2014, there is an attack on the bitcoin network a bug was found out during the pending stage.[8]

Blockchain As a Relief Against Cyber Attack

By Blockchain technology, we can replace all the data storing techniques, which are as if a recording of the transfer of property, legal contracts, wills, etc. Decentralization of any system and distribution of it is an important element for cyber security development.[9]

Blockchain Technology role in Anti-Money Laundering Process

By 2017, there is almost $8 billion of global spending on anti-money laundering compliance. “Blockchain is playing an increasingly prevalent role in combating money laundering”. It is immensely beneficial for the regulators, law enforcement agencies, and financial institutions like banks now they can identify the true and credential party while transaction if there is any type of lacuna in the information and helps regulator to target criminals quickly.[10]

For hackers it is very difficult we can say very close to impossible to manipulate the data present in the blocks of blockchain and make any type of tempering with any transaction makes by any company. Because of this type of rigidity in making change, the information in the ledger creates strong security and prevents crime such as money laundering through which terrorism gets help and many other illegal purposes are also fulfilled.

Money Laundering Impact on the World

  1. There are approximately 36% of Organizations are victimized by monetary/economic crime.

  2. The key component is fraudulent invoicing of trade transactions.

  3. In the past three years expenditure is reached up to 50% regarding compliance.

  4. “Visibility is emerging by linking money laundering to global terrorism financing in the trafficking.”[11]

Traditional Solution Not Adequate

In the present world the system which exists for monitoring purposes of transactions, which are based on traditional technology, is not adequate because of the complexity of transactions.[12]

  1. There is a growing wave in the sphere of new digital financial services and cryptocurrencies.

  2. There is limited collaboration with inter–institutions.

  3. In the traditional method, there is a lack of visualization, automation, and analytical capability.

  4. There is an absence of data management and integrated planning.

Future Of Blockchain Technology In Anti-Money Laundering

Regarding anti-money laundering, there are companies who are currently working one of the companies is ‘R3’ they are trying to understand that how this technology can help the financial industry in the future.[13]


Blockchain Technology is helping many financial institutions and business industries fighting against money laundering, Cybercrime, and financial transaction fraud. Blockchain technology or in a generic sense it is known as “Distributed Public Ledger” technology, which does not have any centralized database and this is the key feature of this technology, because of this key feature we are able to fight and protects ourselves from serious hacking and illegal activities on the network.

European Union has funded a huge amount of $ 5 million on a project for fighting against cyber-crime. Its main aim is to develop tools by using blockchain technology to stop cyber security breaches. In the recent Bangladesh bank, hackers group has attacked which is also the Central Bank of the country with New York Federal Reserve and $81 million stolen from the account of the bank.

Another example that recently has taken place by which everyone is almost aware of a massive attack on the database of the many of the institutions and business companies and in return of that they have asked for the ransom “WannaCry ransomware” its name and asked the ransom money in bitcoins which is untraceable in nature.

This is a serious threat to the world in the financial transaction sector and security of data and its management we need an updated technological system apart from our traditional technology, which we use for monitoring purposes and that should base on the technology name Blockchain Technology.


[1] “Can Blockchain Prevent Cybercrime”, Finextra, 03 August 2017, [2] Law Enforcement Cyber Center, “Blockchain Consortium seeks to tackle Cyber Crime”, [3] Rebecca Campbell, “Blockchain the answer to preventing Cyber Crime”, Cryptocoins News, 01/09/2016, [4] “Can Blockchain Prevent Cybercrime”, Distributed Ledger and Blockchain, Finextra, 03 August 2017, [5] [6] [7] [8] [9] BRYANT NELSON, “Blockchain solution for cyber &data Security”, RICHTOPIA, [10] Kyle Phillips, “Blockchain: a new AML kid on the Block”, Anti Money Laundering, [11] Floyd Dcosta, “Harnessing Blockchain technology to detect and prevent money laundering (AML), Business, June 12, 2017, [12] Ibid. [13] Tom Berkovitch, Blockchain and Anti-Money Laundering – What is the future?, NICE ACTIMIZE ‘Fighting Financial Crime’, July 7th, 2016,


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