Author: admin

Key insights:

• • • Blockchain’s transparency is a double-edged sword— While criminals use crypto for illicit activities, the permanent and public nature of the blockchain ledger creates an undeniable trail, making it a powerful tool for law enforcement to track and seize illicit funds.

    • The rise of crypto forensics— A growing industry of specialized firms and investigators is leveraging blockchain’s inherent design to unravel complex financial crimes, demonstrating that “lost” crypto funds can often be recovered.

    • An evolving battlefield— Despite the ongoing challenges posed by tools like mixers and privacy coins, blockchain technology is fundamentally shifting how financial crime is fought, turning the very system criminals exploit into the means of their capture.

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Cryptocurrencies and other digital assets are used by criminals, which is great for catching them. Indeed, the biggest criticism of crypto since its inception has been its criminal use, which was estimated to be almost half of all activity by the end of 2017. In the past three months alone, asset seizures and forfeitures of more than $22 billion in crypto have been made by authorities in the United Kingdom, the United States, and their international partners.

These historic interceptions of illicit funds prove that the fundamental architecture of blockchain — the digital ledger that underpins most virtual transactions — makes it the perfect tool for catching criminals, validating the hypothesis of Satoshi Nakamoto, the presumed pseudonymous of the person or persons who developed bitcoin, that fraud could be prevented through intentional system design.

While criminals assumed they could optimize their illegal activities using crypto to obfuscate fund flows, the blockchain ledger’s immutability has created a niche for financial crime investigators seeking to unravel these cases. Companies like Chainalysis, Elliptic, and TRM Labs have become synonymous with these investigations, joined by a growing network of smaller firms that are democratizing crypto investigations, combating terrorist financing and online child abuse. Ultimately working to secure seized assets and prevent further harm. By all measures, the ecosystem is expanding rapidly.

Every crypto transaction creates a permanent trail that allows investigators to catch criminals even years after their crimes. This is how, a digital exchange hack in 2016 that resulted in the theft of 120,000 Bitcoin worth $72 million (at the time) and was chronicled in the Netflix documentary Biggest Heist Ever was wrapped up years later with the seizure of $4.5 billion in crypto and the arrest of the two alleged perpetrators in 2022. Law enforcement may not move as fast as crypto, but if the whale is big enough, they will catch it.

Indeed, the scale of cryptocurrency-enabled crime threatens Western economic stability. The FBI received 149,686 crypto-fraud complaints in 2024, totaling $9.3 billion in losses, likely significantly lower than the true figure. More than 100,000 people are trafficked and forced to operate scams from compounds in Cambodia and Myanmar. The Prince Holding Group, a transnational criminal organization headed by Chen Zhi, generated $30 million daily at its peak, approximately $10.95 billion annually.

Financial crime as economic warfare

These are just headlines. Further research in the Netherlands shows that only 11.8% of fraud victims actually report being victimized. While many dismiss fraud and blame victims, crypto-related fraud is becoming economic warfare systematically draining wealth from Western economies while enslaving hundreds of thousands in forced labor camps across the Global South. With potentially $80 billion lost annually to crypto fraud, the impact extends beyond the 1.14% of the US federal budget it represents. This illicit outflow causes loss of productive capital, tax base erosion, and reduced economic activity.

Yet the technology accused of enabling this new generation of fraud simultaneously provides the tools to detect and combat these criminal organizations more successfully than any financial crime fighting technology in history. The Chen Zhi case, easily the largest asset forfeiture in US history at around $15 billion, demonstrates this perfectly.

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Every crypto transaction creates a permanent trail that allows investigators to catch criminals even years after their crimes.

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This is why I’ve spent the last four years studying the crypto ATM industry. While most financial crime professionals saw a problematic service in a problematic industry, I saw a massive dataset of criminal activity that could predict other illicit activity beyond crypto ATMs. This dataset helped identify terrorist financiers, vendors of child sexual abuse material (CSAM), and countless scams and frauds. Layer data-rich sources like crypto ATMs with blockchain data, and a good investigator can achieve remarkable results.

Modern blockchain analytics leverage the features Nakamoto designed for trust and verification. Immutability makes evidence tampering impossible and investigations public; and verifiability allows investigators to validate every step of a criminal’s crypto trail. Consensus mechanisms create a distributed jury of millions, validating the evidence chain further. These features enabled authorities to map the Prince Holding Group’s entire criminal empire, revealing 76,000 fake social media accounts operated from facilities using 1,250 phones across 10 Cambodian compounds, and tie it to $15 billion in bitcoin.

The same technology facilitating billions of dollars in pig butchering scams annually enables law enforcement to catch the transnational criminals and recover funds. Traditional financial crimes disappear into offshore accounts and shell companies, often leaving investigators blind. However, as anyone in blockchain forensics knows, Locard’s Exchange Principle remains true: Every contact leaves a trace. Blockchain’s public ledger means every suspicious transaction leaves a permanent clue.

Nakamoto’s vision of “electronic transactions without relying on trust” inadvertently created a system for establishing criminal culpability. The blockchain’s public nature convinced criminals they could hide in plain sight, but Nakamoto saw that participants would be deterred from fraud by this transparency. The naive assumption that users had nothing to hide if doing nothing wrong quickly revealed plenty were doing wrong. Still, the system proved fit for purpose once tools were built to catch bad actors. Nakamoto’s white paper’s emphasis on preventing double-spending through public verification created a framework in which crime-spending leaves permanent evidence. All a good investigator needs is time.

The rise of crypto forensics

As crypto advances, tools like bridges, mixers, and privacy coins pose constant challenges for investigators, but claiming the money is gone when crypto is involved is simply false. As blockchain forensics advances, criminals face an uncomfortable truth: They’ve been conducting operations on a permanent, public, immutable ledger. Their only protection is time and cryptographic puzzles that an entire industry is working to unravel.

While some industry press reporting has been diligent in pointing out some of the challenges in the industry and some of what’s been missed, there are a lot more illicit fraud cases that never see the light of day because of what has been prevented by blockchain forensics. And while it may not be perfect, the fact that there is an industry working to build a safer financial system than what has gone before is commendable, and the accountability that public ledgers have enabled is energizing for those that must police it.

Unfortunately, the $15 billion Chen Zhi seizure isn’t the end but the beginning. With at least $64 billion stolen annually, these criminals have little incentive to stop. While some scam compounds have been dismantled, reports indicate they’re simply being relocated.

Nevertheless, blockchain is setting a new paradigm in financial crime, one in which the technology enabling crime will eventually become the weapon that defeats it.

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As 2025 draws to a close, tech companies have continued to pour an unprecedented amount of capital into data centers, unveiling multi-billion-dollar investments to meet the surging demand for compute capacity. The United States is expected to continue to lead the way in new infrastructure development and deployment, though Western Europe and Asia are emerging as regions poised for significant growth in investment and build out.

By 2030, analysts are projecting that there will be over 2,000 new data centers constructed worldwide. Global data center infrastructure spending is projected to approach $7 trillion over the next five years, with the bulk of that capital flowing into servers and the chips that drive modern data center performance.  

Evolving Financing Models

While the financial figures continue to rise, considerations for investors across capital markets become increasingly complicated. Location, build-out timelines, and load capacity requirements are key factors shaping project risk. Given the significant capital expenditure involved, investors have had to adopt strategies that not only address the upfront spending required but also account for long-term economic and debt considerations.

To meet the scale of today’s buildouts, investors are increasingly relying on layered capital strategies that combine long-term financing with mechanisms that provide early cash flow. These include tenant prepayment structures, joint ventures with infrastructure funds and pension investors, and real estate–focused arrangements, such as sale-leaseback transactions.

At the same time, traditional project finance lenders are playing a growing role in the sector, underwriting large, syndicated loans supported by long-term leases, stable power-supply arrangements, and other risk-mitigation measures that can anchor billion-dollar developments.

Energy and Power Considerations

Despite the growing clarity around investment pathways, power reliability remains crucial with regard to the future of large-scale data center build-out efforts. With respect to data center power needs, two principal considerations emerge: ensuring reliable power generation and determining the vehicles by which that power is procured. Many hyperscalers have adopted ambitious clean energy goals and are prioritizing low-carbon alternatives like nuclear and renewables paired with energy storage systems.

Ensuring resilient transmission from those power sources to the data center can present significant challenges, particularly given the regulatory hurdles involved. Co-location has emerged as an option for data center developers, siting the facilities alongside existing power generation sources, along with Bring Your Own Generation (BYOG). Still, these arrangements also raise regulatory concerns, as the Federal Energy Regulatory Commission and state energy agencies have often scrutinized these efforts due to resource adequacy and reliability concerns.

Against this backdrop, nuclear power is quickly emerging as a central focus for data center operators seeking reliable, long-term, carbon-free power. Many hyperscalers are already forming partnerships with nuclear companies, exploring options that range from funding the development of new nuclear technology to the restart of previously retired plants.

Growing interest in new-build nuclear, both large-scale facilities and smaller, modular reactor designs, is positioning advanced nuclear generation as an increasingly viable component of future data center power strategies.

Server Connectivity

While reliable grid connectivity remains a necessity for any data center, so too is the high-capacity fiber connectivity that enables data centers to function at scale. Redundant, high-capacity fiber infrastructure is crucial to maintain a dependable connection between data centers themselves and with users and customers all over the world. Diversity in transmission connectivity can also boost overall reliability, with some data centers pairing multiple fiber lines with wireless or satellite point-to-point connections.

One of the primary ways global fiber networks are deployed is through submarine cables, which currently carry more than 98% of all international internet traffic and data. Hyperscalers have become the largest developers of these long-haul systems, leveraging direct ownership stakes and dedicated capacity arrangements to efficiently move data across their global facilities.

In contrast to the heavily regulated energy side, ownership and operation of data centers remain largely unregulated from a telecommunications perspective, at least in the United States. While licenses to operate data centers aren’t currently required by the Federal Communications Commission or most state telecom regulators, the network services provided by hyperscalers are often subject to various regulatory obligations. To secure connectivity, data center operators typically work with telecommunications carriers through established arrangements such as Indefeasible Rights of Use, capacity leases, and master services agreements that provide long-term access to fiber infrastructure.

As data center development accelerates, industry stakeholders will need to continue to navigate rising investment demands, evolving power strategies, and growing connectivity needs. Those able to balance these pressures with thoughtful planning and diversified infrastructure approaches will be best positioned to meet the next wave of global demand.

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