Author: Carlos Kao

As the global cryptocurrency industry transitions to a “regulatory era,” XREX Group, bolstered by strategic funding from global stablecoin leader Tether, announced its foray into Regulatory Technology (RegTech) in 2024. On June 26, the company unveiled its anti-fraud wallet query tool, XRAY.

In its initial phase, XRAY was  launched as a LINE bot. Users can simply paste a blockchain wallet address into the message field of the LINE official account, and like an X-ray scan, XRAY can immediately identify the associated exchange, asset types, total amounts, and potential risks. This tool enables law enforcement agencies to make decisions and take action within hours, a process that previously took 4 to 6 days.

Within less than a month of its launch, hundreds of professionals from law enforcement, banks, exchanges, and large institutions have registered with XRAY. 

Additionally, numerous cryptocurrency tracking enthusiasts have joined the XRAY community. XREX Group has since successfully assisted in advancing six fraud cases into judicial proceedings and developed the an AI-Crypto Flow Analyst, which can automatically analyze cryptocurrency transactions and identify problematic areas.

We are pleased to announce that on July 30, XRAY received an  upgrade with the official launch of a web version with four new features that can be used without registration.

With the release of both the LINE bot and web versions of XRAY, XREX Group has deepened its active investment in the RegTech product line. Moving forward, we will continue to bring together the community, industry, law enforcement, and various stakeholders to build a solid infrastructure and a secure environment for the new financial paradigm. This will significantly reduce risks and prevent illegal activities while advancing the popularization and application of blockchain technology.

No registration required! Discover the four major features of the “XRAY Web Version.”

The name XRAY is derived from the concept of X-rays, akin to performing an X-ray scan on a wallet address to uncover hidden threats and risks. In addition to the basic functionalities of the LINE bot (excluding risk level and risk type queries) and its usage methods, the XRAY web version has introduced four major additional features:

1. No registration required for the use

Unlike the initial use of the LINE bot version, which requires applying for an authorization key, the web version does not require registration. As more advanced features are added, it is anticipated that registration information for the web version will be integrated with the LINE bot version to ensure a consistent user experience between the two.

2. Support for English

The LINE bot version only supports Chinese, while the web version supports both Chinese and English.

3. Integration of Taiwan VASP Operators List

The web version integrates a list of 24 Taiwan VASP (Virtual Asset Service Providers) operators who have completed the Anti-Money Laundering Compliance Declaration, including detailed information such as official websites, contact details, responsible persons, and app download links.

For general users,they can verify an exchange’s official links for apps and websites directly through this page. For law enforcement, they can find the correct contact point directly when further investigations needed.

4. Display complete balance and asset information

Due to interface constraints, the LINE bot version currently only displays four common cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), Tether (USDT), and USDC. The web version, however, can show the complete range of cryptocurrencies within a wallet and track changes in various asset balances.

The web version has some limitations compared to the LINE bot version, such as not supporting batch searches and being unable to view advanced address risk levels and risk types.

Both the XRAY LINE bot version and web version can identify the following:

1. The exchange to which the wallet belongs 
2. Related information about the blockchain address, including the types and quantities of crypto assets in the wallet 
3. (Only for the free advanced version of the LINE bot) The risk level of the wallet address 
4. (Only for the free advanced version of the LINE bot) The wallet’s risk profile includes descriptions of fraud, money laundering, organized crime, sanctions, hacking, etc.

Currently, XRAY can instantly identify domestic exchanges, including, but not limited to, XREX, BitoPro, Maicoin, MAX, ACE, Hoya Bit, Rybit, and BITGIN. International exchanges include Binance, OKX, Huobi, Bybit, Crypto.com, BingX, Bitfinex, Coinbase, and Kraken.

Which version of XRAY should you use? Understanding through two scenarios

Within two days of its launch, the XRAY LINE bot version attracted 500 users, with a key activation rate of 70%. The LINE bot version and the web version can be used in conjunction in different scenarios.

Scenario 1: Avoid Address Poisoning! Quickly verify before transferring funds

Address poisoning scams are prevalent. In May 2024, a hacker targeted a victim who frequently made transactions. The hacker used an address that closely resembled the victim’s commonly used address and transferred 0 ETHto the victim’s wallet.

The next time the victim made a transfer, they mistakenly copied the phishing address from the transaction history without careful verification and transferred 1,155 WBTC to the hacker. The hacker converted these assets into 22,960 ETH (approximately 68 million USD) and may plan to use cryptocurrency mixer to shift the fund .

After checking the address for accuracy, if you are still unsure about the safety of the transaction address, you can use the XRAY LINE bot version. Simply paste and submit the address, and you can immediately verify if the wallet address has any risks or concerns.

Scenario 2: Law Enforcement Investigation: In-depth Tracking of Cryptocurrency Movements

In common “romance scams,” when an online acquaintance requests a cryptocurrency transfer, you can use the XRAY web version to verify the complete asset types and balances or whether the wallet truly belongs to the exchange wallet as claimed by the acquaintance.

Law enforcement agencies investigating fraud cases will also find the web version useful. It helps to quickly identify which exchange the wallet belongs to, allowing for more accurate evidence collection from the exchange.

Understanding XRAY Community Planning through Two Major Phases

XREX has simultaneously launched the XRAY community, which is currently planned to be in two major phases.

In the first phase, anyone with experience and interest in financial flow analysis and willing to contribute to anti-fraud efforts can join by filling out a form and undergoing a review process.

The group has attracted about 30 law enforcement officers and private sector professionals. Sun Huang, Group Chief Information Security Officer of XREX Group, stated that the group will share the latest trends and information on anti-money laundering and anti-fraud, enabling experts to exchange insights and gradually amass the community’s collective strength.

In the second phase, after gathering more professionals, the community will recruit volunteers to assist fraud victims in reporting cases and help them avoid secondary scams. There are also plans to establish a publicly accessible fraud victim reporting form.

Building the AI Crypto Flow Analyst! Successfully Assisting Six Major Cases into Judicial Proceedings

In addition to information exchange, Sun revealed that over the past month, XRAY community members have combined AI with XRAY’s analysis capabilities to launch the XRAY AI Crypto Flow Analyst (currently only available to community crypto flow analysts).

Similar to a cryptocurrency tracking version of the AI chatbot ChatGPT, once the address information to be queried is provided, the AI analyst will automatically analyze the flow of funds from when the victim first fell into the trap, to when the funds were finally transferred to the fraud group’s wallet. It tracks the exchanges, wallets, and any authorizations and high-risk wallets these wallets have interacted with, and lists the sources of the gas fees required for transactions.

The analysis concludes by identifying which wallet the assets in the fraudulent wallet have been consolidated into, and provides recommendations on the next steps for investigation. This allows crypto flow experts and law enforcement personnel to pinpoint the core of the fraud group more accurately and efficiently.

The XRAY AI Crypto FlowAnalyst integrates a total of five financial flow analysis tools:

1. Automatic Fund Flow Analysis: Identifies potential victims, traces the origin of deposits from various exchanges, locates the gas fee sources for fraudulent wallets, and tracks associated addresses of the fraud group.
2. Automatic Creation of Fund Flow Aggregation Charts: Visually displays which wallets the assets in fraudulent wallets are consolidated into.
3. Automatic Report Generation: Automatically generates fund flow analysis reports.
4. XRAY AI Crypto Flow Analyst: Uses AI to analyze problematic wallets, detailing all fund transactions from the source to the final wallet address where the illicit funds are consolidated, thereby identifying the masterminds behind the fraud.
5. Wallet Tracker: After the AI-Crypto Flow Analyst identifies the consolidated wallet address, it can continue to track the wallet’s transaction history to see if it has interacted with high-risk wallets and conduct in-depth investigations.

After analyzing the five financial flow tools above, conclusions and next-step recommendations can be generated through AI technology.

Although the XRAY community has only been established for a month, it has already attracted many experts from various fields and received numerous requests for help from fraud victims. To date, the group has handled 15 cases, 6 of which have been reported and entered judicial proceedings.

Sun stated that the launch of XRAY by XREX Group aims not only to fill the gap in blockchain intelligence tools, enhance the efficiency of law enforcement, and fulfill the responsibilities of financial institutions but also to cultivate and gather more talents in cryptocurrency flow analysis through the community. 

This initiative lays a solid foundation for the industry in the regulatory era, creating a safer and more responsible environment. Starting from establishing patterns of criminal activity in Taiwan, the effort will eventually extend to the patterns of criminal activity across Asia, fostering a high-efficiency, real-time anti-money laundering and anti-fraud joint defense mechanism through public-private partnerships.

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Further Reading： XREX Group Ventures into RegTech with Anti-Fraud Wallet Query Tool XRAY

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About XRAY

XRAY is a blockchain wallet address query tool that can accurately identify blockchain wallet addresses and risk information. Using world-class technology to track suspicious financial flows, XRAY aids law enforcement in combating on-chain financial crimes.

With XRAY, users can query risk information about cryptocurrency exchanges, fraudulent websites, and suspicious wallets and analyze cryptocurrency exchange information. To apply for and activate the XRAY “Free Advanced Version” service, please complete this form.

About XREX Group

XREX Group is a blockchain-enabled financial institution working with banks, regulators, and users to redefine banking together. We provide services to businesses in or dealing with emerging markets and novice-friendly financial services to individuals worldwide.

Founded in 2018, XREX offers a full suite of services such as digital asset custody, wallet, cross-border payment, fiat-crypto conversion, cryptocurrency exchange, asset management, and fiat currency on-off ramps.

Sharing the social responsibility of financial inclusion, XREX leverages blockchain technologies to further financial participation, access, and education.

XREX Singapore operates under the Major Payments Institution (MPI) license issued by the Monetary Authority of Singapore (MAS). XREX Taiwan completed its Compliance Statements on Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) with Taiwan’s Financial Supervisory Commission (FSC) in March 2022 and is a regulated VASP.