A coalition of major crypto firms, traditional finance companies, law enforcement agencies, and security researchers has come together to launch the “Beacon Network,” a new crime-response system designed to track and freeze illicit funds on the blockchain.
Announced Wednesday by TRM Labs, the initiative is described as an “unprecedented level of industry collaboration to block off-ramps for criminal funds.”
Since 2023, at least $47 billion in crypto has been funneled to fraud-related addresses, TRM Labs reported, noting that the true figure is likely far higher.
Through the Beacon Network, verified participants can flag suspicious wallet addresses tied to financial crimes, trace transactions across blockchains, and share intelligence with partner services and law enforcement. When flagged funds reach an exchange or another participating platform, the system automatically issues alerts to ensure assets can be traced, frozen, and prevented from being laundered or withdrawn.
Founding members of the initiative include leading crypto exchanges Coinbase, Binance, Kraken, and Robinhood, as well as PayPal, Ripple, Anchorage Digital, and prominent security researchers such as ZachXBT and the Security Alliance (SEAL).
According to TRM Labs, “Leading federal law enforcement agencies worldwide are actively engaged in the network, flagging high-risk addresses and triggering alerts to help stop illicit actors before they can cash out.”
Complete “kill chain” for illicit cryptocurrency flows
TRM Labs noted that stolen crypto is often shuffled rapidly, making it difficult for authorities to act in time. Following the $1.5 billion Bybit hack earlier this year, for example, the stolen assets were funneled through more than 10,000 transactions within just the first month.
“Up to now, law enforcement and crypto platforms have largely worked in isolation, responding only after illicit funds were gone. The window to intervene is typically measured in minutes, not days. Beacon Network changes that,” the company said.
“Beacon Network is the first end-to-end ‘kill chain’ for illicit crypto assets, moving from detection to action in minutes rather than days.”
Beacon Network is already operational
According to TRM Labs, the Beacon Network is already active and has recorded multiple successes in tracing stolen funds linked to cybersecurity breaches.
In one instance, law enforcement used the Beacon Network to trace $1.5 million tied to a global scam, blacklisting the associated wallet so the funds could be frozen once they reached an exchange.
In another case, investigators uncovered $800,000 in scam-related deposits at a major exchange and flagged the funds to be frozen.
A central safeguard of the system is that only verified participants—such as law enforcement agencies, trusted partners, and vetted security researchers worldwide—are authorized to mark an address as illicit.
Responding to concerns on X about potential misuse, TRM Labs clarified on Wednesday that only verified investigators can flag funds, and only when they have “high confidence in and intend to act on” the information.
“Every flag carries significant responsibility, as it signals to the entire network that the funds should be taken seriously. Misuse or abuse of this system will not be tolerated.”
Top illicit actors will be the focus
While the Beacon Network can be applied to flag any illicit funds, TRM Labs said the coalition will prioritize certain high-risk targets — including wallet addresses and transactions tied to North Korean IT groups known for scamming crypto firms globally.
The network will also focus on disrupting hackers and fraud schemes, blocking terrorist financing, and helping victims recover stolen assets. Expanding participation by bringing new companies into the network has likewise been identified as a key priority.
