SlowMist Releases a Handbook on Blockchain Crypto Asset Tracking: Essential for On-Chain Detectives

This book, "The Handbook on Blockchain Crypto Asset Tracing," was written with this in mind. It's not a professional research report, nor does it aim to provide a profound technical discussion. Instead, it aims to help more people understand the basic framework of on-chain tracing, master the tools, and improve their judgment and response capabilities when facing on-chain risks in a clear and practical way. Whether you're a researcher, investor, journalist, legal practitioner, law enforcement officer, or ordinary victim, you'll find something here that suits you.

Author: SlowMist Security Team

background

While the crypto industry has made significant technological progress over the past few years, crypto-related crime has also intensified. From a growing number of scams, including Ponzi schemes, phishing websites, and fake projects, to exploits targeting DeFi protocols, unauthorized exchange access attacks, and asset hijacking following user private key leaks, the number and value of on-chain crimes continues to climb. According to the SlowMist Hacked database, in 2024 and the first half of 2025 alone, the blockchain ecosystem experienced 531 security incidents, resulting in losses totaling $4.386 billion. Scam Sniffer, a Web3 anti-fraud platform, also reports that Wallet Drainer phishing attacks alone have resulted in approximately $534 million in losses, impacting 375,600 addresses. This number continues to rise, and the true number of victims is far greater than the data suggests.

Anonymity is a double-edged sword for cryptocurrency. While it grants users the right to privacy, it also makes it more difficult to accurately identify malicious activity. Furthermore, the inherent global nature of blockchain often slows down cross-border investigations, judicial assistance, and asset freezes. This makes it difficult to achieve substantive progress in some cases, even with a clear on-chain path. This "visible but intangible" gap is a major pain point for many victims of cryptocurrency.

Many people initially assume, "Crypto assets are on-chain, and all transfers are public and transparent, so recovering funds should be easy, right?" But this isn't the case. On-chain "visualization" is only the first step; true "recoverability" requires overcoming a series of complex challenges. Attackers can launder funds using techniques such as transferring funds between dozens of wallets, withdrawing from anonymous exchanges, obfuscating assets using mixers, and using proxy contracts. Meanwhile, ordinary users lack basic on-chain knowledge, often feeling helpless when faced with risks. This means that even if the funds' path can be clearly visualized, freezing or recovering them may not be possible.

For this reason, basic knowledge of on-chain tracing shouldn't just be a "professional skill" reserved for security researchers or hacktivist groups, but rather a required course for all participants in the crypto ecosystem. Whether you're an average investor or working in crypto projects, media analysis, legal assistance, law enforcement investigations, or other related fields, understanding the logic of on-chain fund flows, mastering basic tracing tools and techniques, and identifying abnormal fund paths will become your first line of defense against risk. At a critical moment, timely path identification can mean buying precious hours to freeze funds; and the correct use of basic tools can help victims reconstruct a complete case.

This book, "The Handbook on Blockchain Crypto Asset Tracing," was written with this in mind. It's not a professional research report, nor does it aim to provide a profound technical discussion. Instead, it aims to help more people understand the basic framework of on-chain tracing, master the tools, and improve their judgment and response capabilities when facing on-chain risks in a clear and practical way. Whether you're a researcher, investor, journalist, legal practitioner, law enforcement officer, or ordinary victim, you'll find something here that suits you.

Due to space limitations, this article only lists the key directory structures in the handbook, which can also be regarded as a guide. The full content can be found at: https://github.com/slowmist/Crypto-Asset-Tracing-Handbook.

Key content

Basic Concepts

1. Mainstream public chains and currencies

Introducing the technical models, ecological characteristics and tracking focus of mainstream public chains such as BTC, ETH, TRON, BNB Chain, Polygon, Solana, Avalanche, Optimism, and Arbitrum.

Explain the role of stablecoins such as USDT and USDC and their significance in tracking and law enforcement.

1. Core concepts of tracking

Blockchain address classification: deposit address, hot wallet address, cold wallet address, contract address, multi-signature address, black hole address, etc.

Transaction structure and elements: key data items such as block height, transaction hash, Gas, currency mixing, exchange, cross-chain, Input Data, Event Logs, etc.

Differentiate between platform types: centralized exchanges (CEX), decentralized exchanges (DEX), cross-chain bridges (Bridge), and nested platforms, and their different roles in tracking and analysis.

UTXO and Change Mechanism: Detailed explanation of the capital input and output model of Bitcoin and similar chains, explaining the concept of change addresses and their impact on fund tracking.

1. Blockchain Explorer

This article introduces commonly used blockchain browsers for various mainstream chains and their functions, and demonstrates how to query addresses, perform transactions, interact with contracts, and other basic operations.

Explain the key roles of tabs, transaction details, token transfer records, contract call functions, and event logs in the browser.

Tracking Tools

1. MistTrack Introduction

MistTrack is an on-chain anti-money laundering and tracking tool independently developed by SlowMist. Its core functions include transaction monitoring, risk assessment, address tagging, and transaction behavior and trace analysis. It currently supports the query and tracking of data from 18 mainstream public chains and has a huge risk intelligence database. It plays an important role in assisting the investigation of on-chain security incidents and supporting compliance and risk control.

1. MistTrack Usage

How to combine blockchain explorers with MistTrack for on-chain fund tracking;

How to identify high-risk addresses, analyze transaction paths, and track the final destination of funds.

1. Community Tools

This article introduces commonly used on-chain analysis and investigation tools that well-known investigator ZachXBT has publicly shared, helping users choose appropriate auxiliary tools based on their needs.

Common capital flow patterns

1. Splitting the chain: Through a large number of small transfers, the funds are gradually split into multiple addresses, extending the funding path;
2. One-to-many distribution: large amounts of funds are split into multiple small amounts and dispersed to multiple addresses, forming a "fan-shaped" structure;
3. Multi-hop transfer: funds are transferred quickly across multiple hops, each address is used only once, does not participate in contracts, and creates long paths;
4. Mixer usage: Funds are injected into the mixing pool and mixed with other assets, breaking the corresponding relationship between funds in and out;
5. Cross-chain bridge jump: Transferring assets to other chains through a cross-chain bridge breaks the path, changes the form of assets, and evades single-chain monitoring;
6. Many-to-one aggregation: Attackers quickly aggregate dispersed assets into a core wallet for easy withdrawal or transfer. This is often seen as an emergency transfer during absconding.
7. P2P/OTC: Exchange assets for fiat currency or privacy coins through peer-to-peer transactions or over-the-counter intermediaries.

What to do if it's stolen

1. Stop loss priority

Emergency Stop Loss:

When assets are abnormal, immediately transfer the remaining assets to a safe wallet or trade in advance to reduce losses;

If you hold tokens that can be frozen (such as USDT, USDC), please contact the issuer as soon as possible to apply for freezing;

Assets flow into centralized exchanges, and evidence is collected to apply for freezing;

Use on-chain tracking tools (such as MistTrack) to track hacker paths and mark risks;

Check whether the wallet permissions have been tampered with or whether there has been malicious multi-signature (link to malicious multi-signature article).

To avoid subsequent injuries:

Check the security of the associated wallet and seed phrase;

Revoke authorization promptly (e.g. Revoke.cash);

Change passwords and enable multi-factor authentication;

Clear potential attack entrances;

Be wary of fake customer service scams.

1. Protect the scene

Stay calm, disconnect from the Internet but do not shut down your computer or delete files, and preserve the original environment for evidence collection;

Save all relevant evidence (chat logs, emails, web pages, etc.).

1. Conduct preliminary analysis

Use blockchain explorers and MistTrack to view fund flows and identify cases of mixed currency, cross-chain transactions, and inflows from centralized platforms;

Understand address context through risk reporting;

Submit the attacker's address to the platform to help prevent it.

1. Contact professional organizations

Seek help from security firms for on-chain analysis, freeze coordination, on-chain outreach, and report generation.

1. Report the crime as soon as possible and seek legal assistance

Report the case to the police and prepare detailed materials;

When cross-border assets are involved, contact a lawyer to prepare for international investigations;

Multiple victims can jointly report the case to increase the success rate.

1. Continuous follow-up and portrait construction

Continuously track on-chain and off-chain clues (addresses, transactions, social media, devices, etc.) to build an attacker profile.

1. Tokens that can be frozen

Including USDT (Tether), USDC (Circle), BUSD, TUSD, PAX, GUSD, etc., apply for freezing in time to prevent capital loss.

Cross-chain bridge tracking analysis

1. Bridge Introduction

The core function of a Bridge is to allow users to lock assets on one chain and obtain a wrapped token of equal value on another, or to directly release the native assets. Key types include decentralized validation, relayer/observer, multi-sig/custodian, liquidity pool, and native cross-chain.

1. Bridge Analysis

Cross-chain bridge browser: Many cross-chain bridges provide dedicated Explorers that can directly query cross-chain transaction details, amounts, and destination addresses.

Blockchain Explorer:

If there is no official Explorer, you can use an on-chain browser (such as BscScan, Etherscan) to parse cross-chain transaction data;

Pay attention to the transaction's Input Data (decoding) and Logs events. Key information includes the receiver (receiving address after cross-chain) and dstChainId (destination chain ID).

The receiving address format may require cross-chain conversion (such as converting EVM address to TRON address).

MistTrack cross-chain analysis: MistTrack supports one-click cross-chain transaction analysis, multi-chain bridge protocols, and intra-transaction DEX analysis.

Privacy Tool Tracking Analysis

1. Mixer Introduction

Mixers are tools that achieve transaction privacy by pooling multiple users' assets and disrupting fund mappings. Main types include smart contract mixers, centralized mixers, collaborative mixing protocols, and privacy coins.

1. Mixer Analysis

Tornado Cash Analysis

Wasabi Coinjoin Analysis

NFT Tracking Analysis

1. Locate the NFT contract address and Token ID;
2. Use tools (such as NFTScan, NFTGo) to query the complete flow of NFT from minting to the current state;
3. Focus on the flow of funds after the NFT is sold at a high price or transferred to the attacker's address.

Address behavior analysis

1. Active behavior feature recognition

Sleep wake-up: A sudden large amount of withdrawal after a long period of dormancy, often caused by absconding or liquidation;

High-frequency transfers: large numbers of small transfers in a short period of time, often used for money laundering or fund dispersion;

Fixed amount transfer: a large number of similar amounts, possibly automated or mixed;

Short-lifetime address: A new address with fast in/out funds, typically a temporary wallet.

1. Address clustering judgment

Input clustering: multiple addresses are combined as transaction inputs to infer the same entity;

Behavioral synchronization: addresses perform the same operations at similar times;

Shared services: calling the same contract or service with similar behavior paths;

Consistent transaction parameters: gas fees, slippage preferences, etc.

Address naming patterns: Some attack groups have obvious patterns in address naming.

1. Risk Behavior Profile

Quickly launder funds;

Frequent calls to the currency mixing protocol;

Frequent cross-chain fund transfers;

Suspicious contract interactions or failed calls;

Automated phishing or theft operations.

1. Address tags and off-chain identities

Interact with centralized exchanges and combine KYC to identify identities;

Identify potential connections with funds from high-risk addresses;

Linking on-chain operations through social platform behavior timestamps;

Leveraging leaked data to assist in fuzzy identity matching.

1. AI Tools and Analytics

Leveraging AI platforms like MistTrack MCP, address profiling, risk scoring, and transaction graphs are automatically generated, improving analysis efficiency and accuracy. Users can use natural language to request tracking of fund flows and behavioral profiling, quickly obtaining results.

Recommendations on Asset Freezing and Recovery

Asset freezing and recovery are complex operations, involving multiple factors, including legal processes, exchange cooperation, and cross-border law enforcement. Freezing applications typically require police or lawyers to initiate, making it difficult for individuals to handle them directly. We recommend preparing a complete chain of evidence and collaborating with a professional security team. Freezing is only a temporary measure; asset recovery relies on a complete, closed-loop process of chain analysis, judicial coordination, and platform coordination.

Final Thoughts

We understand that a manual cannot solve all on-chain security issues, but if it can give you a few more seconds to judge when encountering abnormal transfers, preserve clues as soon as a project runs away, or more accurately describe suspicious aspects of asset flows in media and community discussions, then it has achieved our original intention.

Blockchain security is a protracted battle of offense and defense. SlowMist will continue to work with the community to promote high-quality security education and knowledge sharing. We believe that every revelation of fund flows is a powerful blow to fraud; every clear popular science article, tracking process sharing, and case analysis is a solid shield for the community to jointly safeguard security.

This is the end of the introduction. For the full version, please read and share 🙂

https://github.com/slowmist/Crypto-Asset-Tracing-Handbook/blob/main/README_CN.md

Or PDF version:

https://www.slowmist.com/report/SlowMist-Crypto-Asset-Tracing-Handbook(Beta-CN).pdf

Tip: Click "Read original text" at the end of the article to go directly.

Note: This manual is for educational and informational purposes only and does not constitute legal, investment, or law enforcement advice. The tools, platforms, and cases mentioned are based on publicly available information or simulations and are not intended to target any individual or organization. In actual tracking, please exercise discretion based on your own circumstances and seek professional support when necessary. If you have any suggestions or discover any errors, please contact us.

Disclaimer: As a blockchain information platform, the articles published on this site solely reflect the personal views of the authors and guests and do not represent the position of Web3Caff. The information within these articles is for reference only and does not constitute any investment advice or offer. Please comply with the relevant laws and regulations of your country or region.