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Crypto World

AI agents want to identify your crypto wallet using social media

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AI agents want to identify your crypto wallet using social media

Crypto influencers are taking a preprint, non-peer-reviewed research paper as a terrifying warning about a new unlock for AI agents that allegedly grants them power to deanonymize crypto wallets.

Almost all blockchains like Bitcoin and Ethereum employ pseudonymity in wallet addresses, which are usually presented as a string of characters.

Although wallet addresses are just a string of characters, AIs and easy-to-use agentic tools like Claude Cowork and Perplexity Computer are advancing the capabilities of casual users to deanonymize them.

According to their research, new versions of AI are gaining the power to conduct large-scale deanonymization by taking in posts by billions of humans and linking distinct usernames using highly-processed probability scores. 

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This is akin to making educated inferences that the person behind one username is likely the same person behind another username.

Researchers used Claude tools by the AI giant Anthropic. The paper is a preprint and as such hasn’t been accepted for publication in a peer-reviewed academic journal. However, its conclusions are potentially disturbing and reinforce concerns about crypto privacy.

Exploiting a common opsec error

Unfortunately, many people re-use the same crypto wallet addresses. Although this is bad practice from an operational security (OpSec) and privacy perspective, the commonplace occurrence allows researchers to glean and infer a tremendous amount of information.

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Tracing and deanonymizing crypto has been popular for years at Chainalysis, Elliptic, TRM, Crystal, Coinglass, and Arkham.

However, the use of AI agents to easily link wallets to social and internet platforms is the breakthrough.

Users of Claude Cowork or Perplexity Computer are already asking AI to connect crypto wallets to activity elsewhere.

Read more: AI Agent BadCoin fumbles BSC launch, anti-sniping software flags traders

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Four stages of AI deanonymization

Researchers automated hours of manual research by building a pipeline with four stages:

  • In the “extract” step, AI agents searched for identity-relevant data from social posts that indicated interests and writing style. Importantly, the researchers used raw, unstructured text directly from social networks. 
  • The “search” step encoded the extracted data to perform “nearest neighbor” queries across tens of thousands of candidate profiles. 
  • Next, the “reason” phase applied multi-stage, LLM logic using ChatGPT to select the most likely match. 
  • Finally, the “calibrate” stage asked other AI models to double-check, error-correct, and assign confidence scores. This allowed the researchers to present their inferences as to which usernames across social networks were likely the same person.

Although researchers didn’t focus on crypto wallets specifically — they focused on linking Reddit, Hacker News, and LinkedIn profiles — the implications for crypto are obvious.

Most concerningly, their financial cost per deanonymization attempt was, in many cases, less than $4, putting the capability of deanonymization well within reach of even conservatively funded adversaries.

Mert Mumtaz, CEO of Helius Labs, amplified the research within the crypto community.

Blockchain transactions are visible to anyone. Although crypto is already accustomed to the use of machine learning, heuristics, and clustering algorithms to link wallet addresses to real-world identities by correlating on-chain behavior with off-chain data, this new research demonstrates how off-blockchain data sets like forum posts and social media activity are now exponentially larger in size and trivially automatable.

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Crypto World

World Liberty Moves Toward WLFI Unlock Vote After Complaints

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World Liberty Moves Toward WLFI Unlock Vote After Complaints

Decentralized finance (DeFi) platform World Liberty Financial said Friday it plans to put forward next week a governance proposal that would set a phased unlock schedule for WLFI tokens held by early retail purchasers.

The Trump family-linked DeFi platform said the proposal will be opened for community input before proceeding to a formal vote. According to the project, the vote will not cover a full, immediate unlock, but instead a structured, long-term vesting plan designed to release tokens in stages. 

WLFI tokens remain largely locked for early buyers, with transferability tied to governance-approved unlocks. Tokenomist data shows that about 24.67% of WLFI’s 100 billion token supply has been released, while roughly 75.33% remains locked or pending future unlock decisions.

The proposal could determine when early buyers can finally access liquidity in WLFI, whose use is largely limited to governance. It comes as some holders publicly push back against the prolonged lockups and threaten legal action.

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The concerns add to earlier governance decisions around token restrictions. On March 16, WLFI token holders approved a proposal introducing a six-month lock-up rule for certain transfers, marking one of the first formal changes to the project’s transferability framework.

Allocations for WLFI tokens. Source: Tokenomist

Retail buyers challenge prolonged WLFI lockups

World Liberty’s early sale materials said WLFI tokens were non-transferable and could remain locked indefinitely, with any future unlock subject to a governance vote no earlier than 12 months after the token sale and with no guaranteed timeline.

That 12-month threshold has already passed, with WLFI’s public sale beginning around mid-October 2024, placing the current proposal roughly 18 months after the initial sale. The company raised at least $550 million from WLFI token sales across two funding rounds.

Some self-identified WLFI presale buyers have publicly complained that most of their holdings remain locked, even as parts of the broader token supply have become transferable. 

At least one self-identified buyer said they had filed legal notices and were pursuing claims in the United States and the Netherlands against World Liberty Financial and its backers. Cointelegraph could not independently verify that any lawsuit had been filed. 

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Cointelegraph reached out to World Liberty Financial for comments, but had not received a response by publication. 

Related: WLFI proposes governance staking system and USD1 usage incentives

Onchain borrowing activity adds to holder concerns

One community member said in an X post that the project’s borrowing activity raised concerns among token holders, questioning how treasury funds were being used. Onchain data shows that World Liberty Financial’s treasury borrowed roughly $75 million in stablecoins from Dolomite using WLFI as collateral.

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