Using multiple input addresses in this manner typically requires shared access to their passwords, or private keys. People rarely relinquish their private keys to strangers, for the same reasons they protect their login credentials for online banking. Private keys convey authority over the assets. In a situation like the example above, an analyst may conclude all input addresses were likely controlled by the same party.
How Useful is Common Spend in Cryptocurrency Tracing?
Tracking common spend is a core tactic for blockchain forensics. A number of leading cryptocurrency intelligence tools use advanced algorithms to automate common-spend analysis and ownership attribution across the blockchain.
Analysts in investment fraud examinations and related cases often begin their work with very limited details on the subject. They might be given only a single known cryptocurrency address — a Bitcoin address, for example, where a fraud victim transferred funds six months ago. Common spend and related methodologies can enable analysts to quickly expand their focus from that initial address to a much larger cluster of addresses controlled by the same perpetrator.
Criminals have come to recognize that common spend is a weak spot for cryptocurrency privacy that may be leveraged by law enforcement and blockchain investigators. To preserve their anonymity, many have escalated their obfuscation efforts with counter-defenses such as CoinJoin, CoinSwap, mixers and multisig technologies.
