## 2 Background on Cryptocurrency Fraud  
In brief, cryptocurrency technologies are supported by the blockchain algorithm, which permits the creation of a distributed ledger. This ledger is structured as a sequence of blocks that are cryptographically linked, ensuring that the information stored on them remains immutable, as shown in Figure 1. Each block in the chain contains a set of transactions (\(tx_{n}\)), a timestamp and a cryptographic hash of the previous block (\(block_{i-1}\)), creating a secure and chronological record. This structure not only protects the integrity of the data but also facilitates trust among users, as they can independently verify transactions without relying on a central authority. The blockchain operates on a decentralized network, meaning that no single entity has control over the entire system. This decentralization enhances security and transparency, as every participant in the network has access to the same information, making it exceedingly difficult for any malicious actor to alter the data without consensus from the majority. However, the lack of a regulatory entity and the nature of these distributed systems, which involve a range of properties such as anonymity and decentralization, make these networks an ideal context for cybercriminals to act in. According to recent studies conducted by the European Parliament [20] and Europol [21], some of the most prevalent types of fraud occurring within cryptocurrency networks include the following:  
* Financial schemes. There are a variety of types of fraud that can be categorized in this group. Some examples include the following:
* Pump and Dump. This type of fraud consists of a market manipulation technique involving speculation with a cryptocurrency derivative, in which the fraudster \"pumps\" up the price of the product with the intention of eventually selling all their holdings, consequently \"dumping\" the price of the derivative. * Ponzi Scheme. This is a pyramid scheme in which earlier investors are rewarded with the funds of the newer ones, typically attracted by the potential growth promised by the fraudsters. * Rug Pulls. This is a type of fraud in which victims are encouraged to invest in a promising Non-Fungible Token (NFT) or other token-like project, which is then abandoned by the developers, who quickly disappear, leaving the victims with useless assets. * Phishing attacks. This is a type of fraud where the fraudster fakes their identity, for example, by impersonating a prestigious crypto-investor or creating a fake landing page for a well-known exchange portal. * As a means of payment. Although this does not involve fraud by itself, cryptocurrencies tend to be the way to go for purchasing illegal goods or services on the dark net, given the lack of oversight and control of state authorities on this part of the web. In this manner, cryptocurrencies are used in markets associated with drugs, arms, sexual abuse or hitman services. Additionally, cryptocurrencies are often requested as payment for multiple kinds of cyberattacks, such as those using ransomware, due to their complicated traceability. As shown in the next section, remarkable progress has been achieved on this specific topic. * Money laundering. Although this may not be considered fraud, it typically follows some criminal activity. The anonymity that cryptocurrency wallets offer is ideal for those who want the traceability of their money to be lost. However, it is important to note that cryptocurrency wallets are not always completely anonymous, but offer so-called pseudo-anonymity. When cryptocurrencies are purchased with traditional, traceable money, the cash flow can be traced back to its origin, therefore retrieving the purchaser's identity. To avoid this, special services known as mixers are available online, where users can send their money to be mixed with that of one of the other users before being sent to an untraceable output wallet. These services tend to have a sophisticated infrastructure and charge fees to their clients.