Kitties Are Born Free, And Everywhere They Are In Blockchains
The great promise of financial blockchains is reducing financial risk through radical transparency. Nefarious deeds are detected and punished by market participants because every detail of the transaction is in a widespread public record.
How does work, in practice? A student of mine, Felipe Manzor, went looking, with a bible and a gun his audit experience in one hand, and process mining tools in the other. He looked at CryptoKitties, one of the first blockchain trading games, using NFTs of cute cats. The results are in our paper Suspicious Activity Detection Using Blockchain Process Mining. We found evidence suggesting inconsistent market rules and collusion for price manipulation. We were joined in this by colleagues Venkat Venkatachalam and Andrzej Janusz. There is also a preprint and slides. Andrzej presented the results at the B4ISE workshop attached to CAISE 2025.
On the one hand, this sort of third party analysis is not possible with the market data from traditional markets such as the NYSE, in which counterparty identifiers are missing. On the other hand, it suggests better and more widely available tooling for market participants and regulators would make this behaviour easier to detect and punish.
References
Manzor, F.A.M., Burke, A., Venkatachalam, N., Janusz, A. (2025). Suspicious Activity Detection Using Blockchain Process Mining. In: Grabis, J., Wautelet, Y. (eds) Advanced Information Systems Engineering Workshops. CAiSE 2025. Lecture Notes in Business Information Processing, vol 556. Springer, Cham. https://doi.org/10.1007/978-3-031-94931-9_11