FINANCIAL THREATS IN CRYPTOCURRENCY: UNDERSTANDING RISKS AND CRIME PATTERNS

Abstract

The increasing adoption of virtual currencies in financial markets has raised concerns about financial risks and crimes associated with their trading. This paper explores the challenges in regulating virtual currency platforms and the need for a comprehensive approach to address these issues. It highlights the difficulties in obtaining transaction data, identifying transaction risks, and the overall lack of supervision in the virtual currency market, which has led to various financial crimes.
To tackle these challenges, the paper proposes a method to classify trading entities based on transaction data, aiming to distinguish between legitimate and illegal activities involving virtual currencies. Additionally, the study investigates the impact of significant events, such as trading platform collapses, on virtual currency price volatility. This analysis sheds light on which virtual currencies are more susceptible to such events and which ones are less affected.
In summary, this research aims to provide insights into the relationship between trading entities and virtual currencies, with a focus on identifying and mitigating financial risks and crimes in the virtual currency market.