Instant exchange platforms like FixedFloat and ChangeNOW are often used by hackers and criminals to obscure the trail of their transactions. Unlike mixing services such as Tornado Cash, these platforms perform the swap internally. This means that the originating and destination addresses do not appear on the blockchain, making it difficult to trace the flow of funds.
I don't think hackers and criminals use these exchanges. Both exchanges can freeze funds at any time and require KYC as well as the origin of the coins. Why would anyone take the risk, especially those who are aware that their coins did not come in a legal way?
We are talking about hackers who know what they are doing, not random beginners. Right?
What if we developed a tool that sends the minimum required amount of cryptocurrency through each available chain on these platforms? By doing this, we could build a record of the contract addresses used for these swaps. Although these addresses might change regularly, the tool could regularly run and log any changes.
Additionally, by using timing analysis, it might be possible to match transactions, especially if the amounts are rounded or specific to certain blockchains (e.g., a specific amount of TRX received on Tron that equals 1 ETH). Unlike Tornado Cash, there's no possibility of delaying transactions with these platforms, which could make timing analysis more effective.
To me, this sounds like one of the competent authorities is trying to do an investigation, so now you are stuck and asking for help. (I have reason to doubt that you are targeting Fixedfloat and Changenow here)
What you are proposing will not confirm with great certainty the connection of certain transactions. It's an algorithm that will base its conclusions on assumptions.
Why haven't commercial tracing platforms, such as Chainalysis, implemented a similar method to trace funds after they pass through these instant exchange platforms?
Another platform that will charge for marking coins as "tainted". Super.