A few days back, I shared about Arkham Intelligence which aim is to deanonymize the blockchain through its AI called ULTRA which gathers data and transactions then matching the pseudonymous crypto wallet addresses to real individuals and/or entities that own them. According to its FAQs, the platform can be used to:
💠 See what top traders/investors are doing in real time & using historical data;
💠 Predict future market movements by using on-chain data to track the flow of funds;
💠 Track your portfolio and historical performance;
💠 Conduct due diligence;
💠 Conduct research on & observe illicit fund flows - on-chain sleuthing;
Recently, they announced the new project which they are adding to the Arkham ecosystem, referring to it as the "world's first on-chain intelligence marketplace," the Arkham Intel Exchange. The purpose is "to connect people who want to buy and sell data intel on any crypto wallet address."¹ Apparently, they built the exchange to provide talented sleuths a place to monetize their skills.
The announcement received mixed reactions and some people calling it as a "snitch-to-earn" platform, "snitching-as-a-service" or a "whistleblowing dApp" based on an article posted on Cointelegraph.
Let us take a closer look at what the exchange is all about.
Arkham Intel Exchange
Per the announcement post, it is a decentralized exchange where people can post and fund bounties on crypto wallet addresses that they want to know more about. Users (bounty hunters) can complete and submit needed intel to claim bounty rewards.
To access the exchange (still on beta), one must join a waitlist by completing the sign up form. According to info, over 200k participants have already registered.
On the exchange front interface (topmost space) are names of companies that apparently are using Arkham and the list includes Coinbase, BlockTower Capital, Coindesk, Reuters, Wall Street Journal, Jump Trading, Bloomberg, Jane Street, Fidelity, Galaxy Capital, Bain Capital, TD Securities, Wintermute among others.
I didn't go further so there was no way for me to check the inside of the exchange but here's a preview taken from their announcement post.
How does the exchange work?
👉Anyone who wants to find an intel on any specific wallet needs to post a bounty and fund it using the exchange's utility token, ARKM.
For example, I want to know who is behind a certain crypto wallet, I can submit a bounty request with the corresponding details, re:
🔸 What information I would want to find out.
🔸 How much I am willing to pay for the intel.
🔸 For how long the bounty will run.
🔸 Then I will lock the amount of ARKM tokens in the smart contract. The ARKM will be used to pay the bounty hunters who will complete the task.
Here's the process in diagram format:
👉Bounty hunters who want to claim the bounty will need to stake 10 ARKM to the smart contract.
🔸 If the submission is approved, the bounty hunter gets his 10 ARKM back plus the bounty rewards.
🔸 If it gets rejected, he losses the ARKM (it gets added to the bounty fund).
👉The Arkham Foundation is the final verifying authority for the submissions by the bounty hunters.
Accordingly, except for punishing bounty hunters who spam or submit low-quality intel by slashing their staked ARKM, there is no strict guidelines and/or limitations regarding the types of bounties which may be posted on the marketplace. This is where it gets scary because without any defined rules and restrictions, anyone can exploit another person's private data.
Here's an example of a bounty post:
It was mentioned that any intel sold and bought on the exchange is subject to an exclusive access of 90 days to those who funded the bounty. After such period lapses, the data are added to the Arkham platform and anyone in the community can access them.²
This is another source of alarm. Having private information available for the consumption of anyone who uses the platform can cause privacy concerns.
Summary
🔸 While transactions on the blockchain are publicly available for anyone to view, the owners are anonymous. Other applications (like HoudiniSwap, CoinJoin etc) are even enabling crypto transactions or swaps without a trace, all for the purpose of keeping anonymity. Arkham, however intends to do the opposite - doxing the individuals and entities behind crypto transactions and or wallets.
🔸 Now, there's the Arkham Intel Exchange that allows users to buy and sell data or information through bounties. And Arkham has not set clear limitations or guidelines on what intel requests are allowed. So anyone can basically post and fund any bounty which is not only limited to labeling wallet addresses. Anyone can play detective and that may result to sensitive private information being revealed or mishandled.
🔸 Bounty hunters need to stake 10 ARKM for each intel submission. If their intel gets approved, they get their stakes back plus the bounty rewards. If rejected, the stakes get added to the bounty fund.
🔸 The exchange is still on beta and to access it, one must sign up to join a waitlist.
🔸 ARKM is the token or the currency which will be used on the intel exchange.
Personal Thoughts
Whilst the technology could be helpful in finding scammers and bad actors in the crypto industry, it could also be a way of misuse and exploit people's privacy. Arkham should at least draw a clear line which bounties should not cross and that people's private and sensitive information are at least protected.
With Arkham's plan to making any intel available to the general Arkham userbase after the 90-day period is quite alarming. Would you want your crypto wallet linked to your real identity and published without your consent?
I think it would be more acceptable if the exchange will only allow bounties that have something to do with scams or fraudulent individuals.
It will be interesting to see how the greater crypto community will react or receive this. Hopefully, this application won't become a playground for those with bad intentions.
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Lead image created on Canva. Logo/Screenshots from Arkham. No copyright infringement intended. 17072023/09:40ph