China's Police Develop AI Tool with 90% Accuracy for Identifying Illicit Bitcoin Transactions

Chinese law enforcement has developed an AI-powered tool to identify illicit Bitcoin transactions with nearly 90% accuracy, according to a study published in the Journal of Intelligence.

The framework, built by researchers at China's national police academy, pairs a memory module with a large language model to catch laundering patterns that are pseudonymous and cross-border.

Corresponding author Dr. Sun Jingchao credits the memory module with allowing the model to retain transaction context across multiple hops instead of scoring each transfer alone, which is crucial in catching complex money-laundering networks.