Key Takeaways:
- Argentine authorities froze 25 crypto wallets linked to the LIBRA token and requested user data from major exchanges.
- Investigators traced funds across Solana and Tron, uncovering cross-chain transfers and transaction-splitting activity.
- The case highlights the growing use of blockchain forensics and exchange KYC data in crypto investigations.
A federal court in Argentina announced the freezing of dozens of crypto wallets belonging to the investigation of the controversial LIBRA token, entering a new stage. The action is designed to stop more transfers from taking place and to identify the people behind the wallets and track the movement of money through several different blockchain networks.
Argentina Targets 25 Wallets in LIBRA Investigation
A federal judge ordered the freezing of 25 cryptocurrency wallets that are suspected to be involved in the investigation of the LIBRA cryptocurrency token. The decision also requires Binance, Bybit, OKX, CoinEx, Bitfinex, and FixedFloat, the six biggest crypto exchanges, to share Know Your Customer (KYC) data, transaction logs, IP logs, linked bank accounts, and other account information for the addresses being flagged.
The order comes after Argentina’s Federal Police cybercrime unit carried out a technical investigation to trace digital assets from a group of wallets they had dubbed the “Team LIBRA Wallets. Investigators used blockchain forensic methods to trace assets through several wallets and into centralized exchanges.
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Blockchain Analysis Reveals Cross-Chain Fund Movement
Investigators Track Assets from Solana to Tron
The bulk of the money was transferred from Solana to Tron via an interoperability solution and then settled in a number of addresses, according to the forensic report. The investigators claim the swaps took place within a few seconds, enabling cross-chain transfers without the need for a centralized exchange platform, which is typically required for conventional cross-chain transactions.
The report also noted a tendency to break bigger balances into smaller transactions, a practice known as “smurfing”. Transactions on the blockchain are public and this can make it more difficult to investigate and more time-consuming to recover assets if multiple wallets and networks are used.
Because of their ability to facilitate the interoperability of different blockchains, cross-chain bridges have become a staple in the crypto ecosystem. But, the use of cryptocurrencies has become a hot topic for law enforcement across the globe, particularly in the context of fast wallet fragmentation.
Exchanges Face Greater AML Scrutiny
This new court order is further evidence of the importance of centralized exchanges in crypto enforcement. While wallet analytics can provide details on the transactions made by wallets, determining the identity of the wallet owners usually requires access to exchange KYC and compliance data.
The LIBRA investigation is a hallmark of the growing trend of multi-jurisdictional AML surveillance and on-chain forensics by regulators and law enforcement. Investigators are being provided with more tools to link blockchain activity to verified customer identities, as more exchanges improve their compliance programs.
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