Blockchain transparency: turning the technology of risk into a tool for justice

Albert Quehenberger, Founder and CEO of AQ Forensics, joins us after his participation at the Cardano Summit to discuss the growing risks of fraud in the crypto ecosystem and the human factors behind them.

AQ Forensics’ mission is to make blockchain technologies secure and prevent their misuse by criminals. From your perspective, what recent blockchain innovations should financial institutions and fintechs be most aware of?

Financial institutions are the gatekeepers of the global financial system, which gives them a special duty of care toward their customers. The blockchain itself is secure — in the vast majority of cases we investigate, there are no technical failures. The real weakness lies in human behaviour: people are manipulated, deceived, or simply lack the literacy to protect themselves. Criminals rarely hack the blockchain — they hack people. That’s why financial institutions should view innovation through a human-security lens. Wallets, recovery phrases, and seed management need to be made understandable. Interfaces should alert users to risks rather than overwhelm them. Ultimately, we must start digital education early — even in schools — to teach young people how to navigate social media, recognise manipulation, and handle digital value responsibly. Awareness is the new firewall.

How are criminals exploiting these technologies? What are the most common types of crypto-related fraud you’re seeing today? 

We see a broad spectrum of scams. The most common include ransomware attacks, phishing, investment scams, task/job scams, doubling scams, impersonation, and recovery scams.

Each targets different demographics. Single parents looking for income are lured by ‘task jobs’ – small online gigs that initially pay modest crypto rewards for simple actions like rating hotels. Once trust is built, victims are asked to reinvest their earnings to access higher-paying tasks. Many unknowingly become part of money-laundering networks, losing their savings or taking out loans to ‘level up’.

The most tragic cases involve lonely seniors or romance scams. Fraudsters build emotional connections, sometimes over months, gaining remote access to devices, understanding financial situations, and draining entire life savings.

Every form of fraud exploits a different vulnerability – greed, loneliness, or hope – but all share the same pattern: psychological manipulation before the financial damage begins.

Who tends to be the most vulnerable to crypto fraud, and why?

Sadly, anyone can fall victim, but certain groups are especially at risk. Elderly people living alone often crave human connection and trust easily. Scammers exploit that empathy and attention. Single mothers or financially struggling individuals are targeted with false job offers. And young, ambitious investors fall for high-return trading schemes that mimic legitimate financial platforms. Fraud doesn’t discriminate by education or profession. We’ve seen engineers, lawyers, and teachers all deceived by well-structured social-engineering campaigns. What they all have in common is emotional leverage – the fraudster builds trust first, then strikes.

What early warning signs can help detect fraudulent activity on-chain? How can fintechs and financial players strengthen their defences? 

The most effective off-chain prevention is simple: listen to your instincts. If someone pressures you into acting quickly, claims an offer is about to expire, or asks for an upfront payment, stop immediately. Real opportunities don’t depend on urgency. Check official warning lists from financial regulators or law enforcement, and look into community forums where scams are often flagged early. A quick search can save thousands of euros.

Technically, wallets can and should be checked before transactions. Even free blockchain explorers display risk flags. AQ Forensics works with a US partner on a deconfliction database that now includes over 500 million addresses linked to investigations, maintained by 450+ law enforcement agencies worldwide. Such tools empower both institutions and individuals to assess risk before funds are lost.

What are the most frequent pitfalls companies encounter when managing crypto-related services? 

Most companies underestimate the human element. They focus on infrastructure but neglect training. Security features are often removed too early to make onboarding smoother. On- and off-ramp checks, OSINT data, and KYC information often exist in silos rather than being connected into a unified risk picture. Equally critical is the absence of clear evidence-preservation procedures and law-enforcement coordination. Many organisations also communicate risk poorly — warnings feel like barriers instead of education. True prevention combines technical protection with human clarity.

What does ‘trust and security’ mean in the Web 3 ecosystem? 

Trust, security, and transparency are the core assets of Web 3. The technology enables self-sovereignty, but with freedom comes responsibility and the need for literacy. A common myth is that cryptocurrencies used in a scam are immediately sent into a mixer and therefore ‘gone forever’. That is an oversimplification. While criminals sometimes use mixers, privacy coins, or cross-chain bridges to obscure flows, every transaction leaves traces, and many movements remain analysable. We frequently demonstrate that timely action works: in one ransomware case, we tracked the ransom payment in real time, froze 10 of 21 BTC (USD 1.078.400), and continued to monitor the remainder. The police are often surprised when we manage to intercept stolen crypto and, together with law enforcement, return funds to victims. These successes matter — they show that significant results are achievable when the right measures are taken quickly. Cases are most successful when we are involved from the start (ransomware) or when the transactions are still recent and traceable.

You recently attended the Cardano Summit. What were your main takeaways on safety, regulation, and collaboration? 

Cardano Foundation demonstrates that decentralisation and security are not contradictions. The Foundation actively invests in education, transparency, and collaborative governance — through initiatives like the Cardano Academy and open reporting structures that strengthen community accountability. There is a partnership between the UNDP’s Tadamon program and the Cardano Foundation to create verifiable digital credentials on the Cardano blockchain for Civil Society Organisations, streamlining verification processes and reducing fraud while enabling over 5,200 CSOs across 57 countries to prove their legitimacy and access development assistance more efficiently.

Sources and References

Chainalysis (2025) – Crypto Crime Report 2025: Stolen funds increased by approximately 21% year-over-year to USD 2.2 billion.
https://www.chainalysis.com/blog/2025-crypto-crime-report-introduction/

Chainalysis (2025) – The Landscape of Seizable Crypto Assets in 2025. https://www.chainalysis.com/blog/landscape-of-seizable-crypto-assets-2025/

Cardano Foundation (September 23, 2025) – Cardano Foundation Roadmap: Global Adoption and Education Focus.
https://cardano.org/news/2025-09-23-cardano-foundation-roadmap/

Cardano Foundation (2025) – Reports: Activity and Impact (2024 Insights published on-chain). https://cardanofoundation.org/reports

Chainalysis (July 2025) – Crypto Crime Mid-Year Update 2025: Illicit volumes on track to meet or exceed USD 51 billion.
https://www.chainalysis.com/blog/2025-crypto-crime-mid-year-update/

Federal Trade Commission (March 2025) – New FTC Data Show Big Jump in Reported Fraud Losses: USD 12.5 billion in 2024, including USD 5.7 billion in investment scams. https://www.ftc.gov/news-events/news/press-releases/2025/03/new-ftc-data-show-big-jump-reported-losses-fraud-125-billion-2024

Crystal Intelligence (April 2025) – Inside the Top Crypto Hacks and Scams: Crystal’s 2025 Report https://crystalintelligence.com/thought-leadership/22-7b-in-stolen-digital-assets-since-2011/

About author

Albert Quehenberger is the Founder of AQ Forensics, an Austria-based blockchain investigation firm. A former intelligence officer, he has founded two companies — completing one successful exit — and co-authored a book on cybercrime and blockchain investigations. He has lectured at the United Nations on crypto forensics and digital risk, and advises several blockchain companies focused on digital inheritance and asset recovery, promoting trust and transparency in the digital era.

 

About AQ Forensics

AQ Forensics GmbH is an Austria-based investigative firm specialising in blockchain forensics, cryptocurrency tracing, and OSINT-driven intelligence. The company assists law enforcement, financial institutions, and private clients in investigating illicit crypto flows, verifying sources of funds, and managing asset recovery in insolvency cases and digital inheritance matters. By combining on-chain analysis with traditional investigative methods, AQ Forensics promotes transparency and accountability in the blockchain ecosystem.