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Blockchain Technology and Smart Contracts for Fraud Detection and Deterrence in Cryptocurrency Markets

Karina Kasztelnik

Journal of Forensic Accounting Research2025https://doi.org/10.2308/jfar-2024-023article
AJG 2ABDC B
Weight
0.50

Abstract

This study examines how blockchain transparency and smart-contract automation, paired with anomaly-detection models, support early detection and calibrated deterrence of manipulation in cryptocurrency markets. Although transparent ledgers and rule-based execution raise the likelihood that irregular activity is flagged and investigated, they do not prevent fraud; my emphasis is detection, deterrence, and post-incident support. I analyze a long-horizon Bitcoin panel using rolling z-score screens and Isolation Forest to surface anomalies consistent with manipulative trading. I fix a false-positive budget ex ante and evaluate capacity-aware performance (Precision@k, PR-AUC, lead time), archiving time-stamped evidence bundles for auditability. Alerts cluster around episodes consistent with pump-and-dump behavior, large-holder moves, and event-driven dislocations, improving investigative triage without prevention claims. The framework provides actionable guidance for exchanges and regulators seeking to strengthen market integrity through auditable records and model-based alerts, and I release a human-in-the-loop agentic AI application that automates ingestion, screening, ranking, and auditable export. Data Availability: A replication package including the agentic AI GenApp (Streamlit code), requirements, and input templates (daily data, events, sentiment) is provided in Appendix B. The package reproduces the pipeline exactly as specified in Section IV and writes time-stamped artifacts for audit; it is intended for detection and deterrence workflows and makes no prevention claims. JEL Classifications: G12; G15; G18; G24; G14; G41; H83.

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https://doi.org/https://doi.org/10.2308/jfar-2024-023

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@article{karina2025,
  title        = {{Blockchain Technology and Smart Contracts for Fraud Detection and Deterrence in Cryptocurrency Markets}},
  author       = {Karina Kasztelnik},
  journal      = {Journal of Forensic Accounting Research},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.2308/jfar-2024-023},
}

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

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