Originally published on: September 20, 2024
During the next five years, artificial intelligence will be employed by government prosecutors and taxation authorities to monitor the blockchain and combat criminal activities, according to the CEO of Chainalysis.
Michael Gronager, the CEO of Chainalysis, expressed his belief that within the next three to five years, generative AI agents could be used by governments to sift through the blockchain and fight crime more efficiently. Speaking at the Token2049 conference in Singapore on Sept. 20, Gronager emphasized the benefits of using cryptocurrency to solve crime, citing its scalability, ease of use, transparency, and international accessibility.
He explained that automating investigations with generative AI would streamline the process, preventing different departments from overlapping and interfering with each other’s work. Gronager also mentioned that while AI agents could potentially catch crypto tax dodgers, those who executed ordinary crypto transactions five years ago or more might still escape scrutiny.
However, Gronager warned that advancements in crypto tax legal advice and software tools could soon close this loophole. The IRS and other tax authorities are already utilizing AI to track individuals who evade taxes through cryptocurrency transactions.
Despite the challenges posed by privacy tokens like Monero, which make it harder for AI agents to identify criminals, Gronager noted that privacy transactions make up less than 1% of all cryptocurrency transactions. Chainalysis previously reported that nearly $100 billion in illicit funds have been transferred from known wallets to crypto exchanges or other conversion services since 2019.
While the threat of criminals using privacy tokens remains a concern, the use of AI agents to police cryptocurrency transactions is expected to increase in the coming years.
