Reversible blockchain transactions would improve cryptocurrency

cointelegraph.com:

A proposal out of Stanford University to make crypto transactions reversible is adding a wrinkle to discussions of crime and fraud prevention. Researchers suggested that mutability — the ability to reverse blockchain transactions — would help prevent crime.

One of the advantages of cryptocurrency is that it is possible for the market — individuals, traders and banks — to decide if reversibility is wanted. Not only would a new (reversible) cryptocurrency be able to test the acceptance or desire for reversible transactions, it would help to test the idea that reversibility reduces crime.

Although cryptocurrency is not a tool of the dark web, it’s sometimes portrayed as such. Fraud, scams and other forms of crime do happen and are growing in proportion with the amount of money invested and the number of coins traded.

One of the main ways law enforcement addresses crime in crypto markets is with blockchain forensics. Blockchain forensics is a growing field in law enforcement where transactions are analyzed to follow and recover stolen or fraudulently obtained cryptocurrency assets. It first achieved prominence a few years ago when the United States Internal Revenue Service used it to successfully recover the ransom Colonial Pipeline paid to the hackers who took control of it. But in the highly decentralized and risky world of cryptocurrencies and nonfungible tokens, blockchain forensics is becoming an important tool for compliance as well as regulation, creating potential impacts on legitimate traders.

Related: Get ready for the feds to start indicting NFT traders

Investigators closely scrutinize the transactions recorded on blockchains, looking for signs people are trying to hide or disguise their tokens. Some of these include