When the Remitano exchange lost $2.7 million on September 14, 2023, blockchain analytics firm Cyvers Alerts detected the suspicious transactions within hours and raised the alarm. When CoinEx was drained of $55 million, independent investigator ZachXBT traced the stolen funds to the same North Korean-linked wallets used in previous attacks. These investigators did not have special access or insider information — they used blockchain forensics, a set of techniques that anyone can learn to understand how funds move across public ledgers. With Bitcoin at approximately $26,540 and Ethereum at $1,627, understanding how to read blockchain transactions is an essential skill for anyone participating in the cryptocurrency ecosystem.
The Basics
Blockchain forensics is the practice of analyzing public blockchain data to trace, identify, and understand the movement of cryptocurrency. Unlike traditional banking, where transactions are hidden behind institutional walls, most blockchains record every transaction on a public ledger that anyone can read. This transparency is both a feature and a vulnerability — it means that stolen funds can often be tracked, but it also means that anyone can observe your transaction history.
The fundamental unit of blockchain forensics is the transaction. Every cryptocurrency transaction records a sender address, a recipient address, an amount, a timestamp, and sometimes additional data like gas fees or smart contract interactions. By following the chain of transactions from one address to another, investigators can build a map of how funds flow through the ecosystem.
Wallets and addresses are the building blocks of this analysis. A cryptocurrency address is a unique alphanumeric identifier — Bitcoin addresses start with 1, 3, or bc1, while Ethereum addresses begin with 0x followed by 40 hexadecimal characters. Addresses are derived from public keys and are designed to be shared publicly. The matching private key is required to authorize spending from an address, and this private key should never be shared.
Why It Matters
Understanding blockchain forensics matters for several reasons. If you are the victim of a hack or scam, forensic techniques can help you trace where your funds went and potentially assist law enforcement in recovering them. Even if you never become a victim, understanding how transactions are traced helps you make better decisions about privacy and security.
The Remitano hack provides a perfect case study. When the attacker moved 1,359,253 USDT from Remitano’s hot wallet to address 0x74530e81e9f4715c720b6b237f682cd0e298b66c, that transaction was permanently recorded on the Ethereum blockchain. Investigators could then watch as the attacker converted stolen USDC and ANKR to 163 ETH and transferred those funds to HitBTC, a centralized exchange. Because centralized exchanges require identity verification (Know Your Customer procedures), this transfer potentially exposed the attacker’s real identity.
Tether’s decision to freeze $1.4 million in USDT on the attacker’s TRON address demonstrates how blockchain forensics enables rapid response. By tracking the stolen funds in real time, Tether was able to freeze the relevant address before the attacker could move all the proceeds.
Getting Started Guide
Beginners can start exploring blockchain forensics with free, publicly available tools. For Ethereum, Etherscan.io provides a comprehensive interface for searching addresses, transactions, and smart contracts. Enter any Ethereum address and you can see its complete transaction history, current balance, token holdings, and interaction history with decentralized applications.
For Bitcoin, Blockchain.com Explorer and Blockchair offer similar functionality. You can search by address, transaction hash, or block number to trace the movement of BTC across the network. These tools display inputs and outputs for each transaction, allowing you to follow the money trail.
Address clustering is a more advanced technique that groups related addresses together. When a transaction has multiple inputs (funds sent from multiple addresses in a single transaction), those addresses are likely controlled by the same entity. This technique helped investigators link the CoinEx hack to the Lazarus Group — analysis of the receiving addresses revealed patterns consistent with known North Korean operations.
Several professional-grade tools offer enhanced capabilities for serious investigators. Chainalysis and Elliptic provide enterprise blockchain analytics used by exchanges and law enforcement agencies. These platforms use machine learning to identify high-risk addresses, track cross-chain movements, and generate compliance reports. While expensive for individual users, their public reports and research papers offer valuable insights into how forensic techniques are applied in practice.
Common Pitfalls
Novice investigators often make the mistake of assuming that a single address represents a single person or entity. In reality, exchanges use thousands of addresses for operational purposes, and sophisticated attackers distribute stolen funds across hundreds of addresses to complicate tracing efforts. The Remitano attacker, for example, used separate addresses on Ethereum and TRON, moving funds across chains to create additional complexity.
Another common error is confusing correlation with attribution. Just because funds pass through an address does not mean the address owner is the attacker. Funds stolen from CoinEx were partially routed through legitimate DeFi protocols and exchanges, meaning those platforms’ addresses appear in the transaction chain despite having no involvement in the theft.
Privacy coins like Monero and mixing services like Tornado Cash present additional challenges. These tools are designed specifically to obscure transaction trails, making forensic analysis significantly more difficult. Investigators must rely on contextual analysis, timing patterns, and behavioral profiling when the blockchain trail goes cold.
Next Steps
For those interested in going deeper, start by practicing with publicly available tools. Pick a known hack or exploit — the Remitano breach is well-documented — and try to follow the funds yourself using Etherscan. Read the research reports published by blockchain analytics firms, which often provide detailed breakdowns of how major hacks were traced. Consider taking online courses in blockchain forensics, and if you are technically inclined, explore open-source tools like BlockSci and Bitcoin Tracker that allow programmatic analysis of blockchain data. The field is growing rapidly, and the skills are increasingly valuable as the crypto ecosystem matures.
Disclaimer: This article is for informational purposes only and does not constitute financial or investment advice. Always conduct your own research before making any financial decisions.
ZachXBT basically built a one-person crime fighting operation using free tools. imagine what proper funding could do
ZachXBT traced CoinEx funds to the same DPRK wallets used in previous attacks. This guy does more for crypto security than most audit firms.
zachxbt doing solo what entire firms charge millions for. the guy is a one person deterrent against north korean hackers
Tomer A. one guy with a block explorer tracing 55M from CoinEx to DPRK wallets while Chainalysis charges 7 figures for slower results. the efficiency gap is embarrassing for the firms
Mira L. one guy with a block explorer outperforming Chainalysis is the strongest argument for public ledgers. transparency is a feature
Tomer A. zachxbt solo outperforming entire chainalysis teams is both impressive and embarrassing for firms charging 7 figures
Great intro article. The transparency of public ledgers is underappreciated by people who only see crypto through the scam lens.
Fatima the transparency is underappreciated until you realize ZachXBT traced 55M from CoinEx to DPRK wallets using nothing but a block explorer and patience. one guy outperforming firms charging millions
the transparency angle is what sold me on crypto long term. every transaction traceable means criminals have nowhere to hide long run
nina_opsec the traceability cuts both ways though. privacy advocates hate that every transaction is public forever
Cyvers Alerts catching the Remitano hack within hours shows how fast on-chain monitoring has gotten. The tools are there if you know where to look
Cyvers catching the Remitano 2.7M drain in hours vs traditional bank fraud taking months. public ledgers are genuinely a faster forensic layer than SWIFT ever was
onchain_sleuth the crazy part is Cyvers detected the Remitano hack before Eterbase even knew they were drained. detection tools are faster than the victims now
Learning to read blockchain transactions should be taught alongside basic financial literacy. This is a good starting point.
the Remitano detection in hours vs traditional bank fraud taking months is the real value prop. public ledgers are a feature not a bug for law enforcement
remitano losing $2.7M detected in hours vs traditional bank fraud taking months. on-chain monitoring is just faster
ZachXBT solo tracing $55M from CoinEx to NK wallets while chainalysis charges 7 figures for the same work. one man forensic army
chainhawk_ ZachXBT working solo and outpacing Chainalysis teams charging 7 figures is the most bullish thing for decentralized investigation. one guy with a browser
satoshi_trail one guy with a browser outperforming Chainalysis is a massive indictment of how slow institutional blockchain forensics has become. bureaucracy kills speed
chainhawk_ zachxbt works solo with public tools and outpaces firms charging 7 figures. the gap isnt skill, its bureaucracy
chainhawk_ ZachXBT traced $55M to the same DPRK wallets from previous attacks. pattern recognition from public ledger data is the strongest argument for transparent chains over privacy coins
the Remitano hack detected in hours vs traditional bank fraud taking months. public ledgers are genuinely better for fraud detection
zachxbt traced 55M from coinex to the same north korean wallets in hours. one guy with no special access doing better than entire compliance teams
26k BTC and they still use public ledgers. the transparency that makes crypto appealing is also its forensic weakness
public ledgers caught the Remitano 2.7M in hours. try doing that with a traditional bank wire through 3 correspondent banks