This Ukrainian Startup Aims to Automate Crypto Crime Reporting Using Smart Contracts and Artificial Intelligence

In collaboration with Ukraine’s cyber police, HAPI Labs has established a reporting mechanism for fraud and criminal-related addresses.

In beta, Scamfari OSINT enables users to report crypto wallets associated with scams, sanctions violations, terrorist funding, and other crimes. The agency stated on Monday that the effort is sponsored by Ukraine’s cyber police, which will try to freeze such wallets.

HAPI, a crypto startup that develops cybersecurity tools for decentralized finance (DeFi) platforms, previously held two-week-long contests in which participants were asked to find and report crypto wallets associated with fraud and other crimes, with a particular emphasis on the funds pro-Russian volunteers raise to aid Russian troops invading Ukraine. Users who say the most wallets are rewarded with HAPI’s native token, but only if the reports are validated by the company’s staff and are indeed tied to criminal activity.

A person registers through a Telegram bot, fills out a form, and sends a blockchain address and a screenshot proving that the address is being used for illegal activities.

Then, two HAPI staff members personally examine whether or not reports include accurate and pertinent information and either accept or reject them. After receiving an account, the reporter is rewarded with HAPI’s tokens, now worth around $13 apiece. $1 for a new address in the database, 10 cents for a previously reported address, and $5 for an address associated with a sanctioned person or company, according to the director of research at HAPI, Mark Letsyuk.

Currently, prizes are issued manually every two weeks, but HAPI intends to automate reward distribution in the future using smart contracts.

Since the beta launch of Scamfari OSINT a week ago, over 15,000 addresses have been supplied, including wallets requesting cash for Russian mercenaries fighting in Ukraine, he noted.

HAPI may also use AI to automate report acceptance in the future, according to Letsyuk: “We’re now feeding the reports we get to the [latest AI product by OpenAI] GPT-4 — it’s extremely raw, but shows promise. We’re not trying to create a buzz, but we feel this might be useful in the near future.”

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