An Interpretable Approach to Money Laundering Detection in Transaction Graphs using Pass-Through Templates

RESUMO

Layering is a key stage of the money laundering process in which assets are moved through intermediate entities to obscure their origin. We model this movement as a transaction graph, a labeled directed multigraph where nodes represent entities, such as individuals or organizations, and edges represent transactions between them. This work addresses the detection of layering patterns in transaction graphs. We define pass-through templates, a class of transaction graphs whose structure is indicative of a specific layering pattern in which entities receive funds and rapidly forward them. We formulate detecting instances of these templates within a larger transaction graph as a maximum-cardinality, maximum-weight matching problem. The resulting method uses Edmonds' blossom algorithm, which provably finds an optimal solution to this problem. Here we present a case study on publicly available Ethereum transaction data. We identify 283 pass-through template instances, chained through shared address nodes into a densely interconnected network that moves hundreds of millions of dollars in stablecoin value. We find that six addresses in the identified network are sanctioned by the U.S. Department of the Treasury for associations with criminal organizations, providing evidence of ties between the network and sanctioned criminal entities.