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Ciphertrace Inspector Launches LIFO/FIFO Tracing

Ciphertrace announces new defi-optimized tracing capabilities that allow financial investigators to reliably “follow the money” in Ethereum and will soon also be available in Tron and other EVM blockchains. By providing a choice of Last In, First Out (LIFO) or First In, First Out (FIFO) tracing, along with Ciphertrace’s auditable attribution, agents are empowered to leverage clearly defined forensic accounting methodologies for substantiated evidentiary support in court.

In the world of tracing financial flows, accountants use a methodology for evaluating inflows and outflows to an account from the perspective of either LIFO or FIFO. Generally, the US uses LIFO while the rest of the world uses FIFO. These methods affect the way profit and loss is calculated and how to look at specific funds once they are commingled with others in an account.  As asset flows have become more digital and expanded onto blockchains, the same two tracing methods therefore are required.

This feature will empower investigators to:

Account for funds after they have been moved or commingled

The feature will allow an investigator to follow funds under investigation from one account to another via the precise transactions that contain those specific funds.

Follow specific funds among several inputs and outputs even when they are split into multiple transactions

When a deposit of suspect funds moves into an account, they are mixed in with other deposits. This may create difficulty in knowing where the suspect funds end up and distinguishing between suspect funds and other deposits. The feature automatically informs the investigator of which outgoing transaction/s are most relevant, according to the methodology.

Stay compliant with GAAP or IFRS accounting rules (LIFO for US, FIFO for non-US)

Investigators who are evaluating inflows and outflows in accounts (i.e. as for tax and reporting purposes) will find the LIFO/FIFO feature invaluable for evaluating gains and losses in accordance with approved accounting standards  in their jurisdictions.

Clearly define forensic accounting methodology for substantiated evidentiary support in court

Investigators, law enforcement, lawyers and other financial professionals need to be able to provide evidence in court regarding ownership, accounting methods, source of attribution and clustering heuristics. This feature will programmatically enable LIFO or FIFO methodologies to be demonstrated as part of a thorough forensic analysis that will stand up in court.

Contact us today for more information.

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