A consortium of crypto industry heavyweights, law enforcement agencies, security researchers, and fintech firms has come together to form the Beacon Network — a real-time crypto crime response system that can help freeze illicit funds before they can be laundered or withdrawn.

Led by blockchain security firm TRM Labs, Beacon Network was announced on Aug. 20 to function as the first end-to-end “kill chain” for digital asset crime, designed to detect, flag, and disrupt suspicious blockchain transactions within minutes.

TRM Labs leads Beacon Network founding members

Founding members behind the initiative include crypto exchanges like Coinbase, Binance, Kraken, and Robinhood, payment platforms such as PayPal and Stripe, and compliance-focused firms like Ripple, Anchorage Digital, and Blockchain.com, among others. 

These members will work alongside “leading federal law enforcement agencies” to flag suspicious wallet addresses and share information across the network. 

According to TRM Labs, Beacon Network marks a turning point for crypto crime response, shifting the approach from isolated, delayed reactions to a system where platforms and law enforcement are able to act together instantaneously. The network’s purpose is to stop stolen funds in their tracks, allowing affected platforms to act before the money reaches fiat conversion points.

Participants hope the network will play a vital role in protecting users and rebuilding trust in the crypto ecosystem.

“Safety and security are the foundational pillars of crypto, and it is the collective responsibility for those committed to the future of our sector to promote its integrity,” Antonio Alvarez, Chief Compliance Officer of Crypto.com was quoted as saying.

Each member contributes by sharing verified intelligence, monitoring flagged wallets, and helping authorities trace the movement of funds through the blockchain.

How will Beacon Network function?

Beacon Network’s infrastructure relies on automated alerts and a growing database of flagged wallet addresses. Once an investigator or platform identifies suspicious activity and flags an address, the network automatically propagates that label across linked wallets. 

If those funds are sent to any participating exchange, the system sends an instant alert, allowing the platform to hold the transaction before funds are withdrawn.

To ensure the infrastructure is not misused, only vetted users, such as law enforcement partners, established exchanges, and accredited security researchers, are allowed to flag addresses. 

TRM Labs said every flag must be supported by strong evidence and a clear intention to act, as misuse of the system would undermine its integrity.

Beacon Network has already been tested

According to TRM Labs, Beacon Network has already helped trace millions of dollars’ worth of stolen funds.

In one case, investigators were able to flag $1.5 million tied to a multi-national scam, which subsequently allowed a participating exchange to freeze the funds. In another case, $800,000 in suspected scam deposits were intercepted before bad actors were able to withdraw.

The network targets a wide range of criminal activity, including state-sponsored hacks, scams, and terrorist financing. 

A key focus is dismantling illicit networks operated by North Korean IT workers and hacking groups, which TRM Labs says are responsible for a substantial portion of global crypto theft.

Billions lost in H1 2025

Crypto crime has surged in recent years, with 2025 shaping up to be one of the worst on record. In the first half of the year alone, criminals siphoned off over $2.1 billion in digital assets across 75 incidents. The majority of these losses came from infrastructure attacks, such as private key thefts and front-end exploits.

The $1.5 billion Bybit hack in February 2025 accounted for nearly 70% of the year’s total stolen funds. Attributed to North Korean hackers, the breach involved over 10,000 transactions in its first month, illustrating how quickly stolen funds can be laundered.

The foundation for Beacon was laid a year earlier, when TRM Labs joined forces with Tether and TRON to create the T3 Financial Crime Unit, focused on following dirty money across the blockchain in real time. 

T3 FCU focused on monitoring USDT activity on the TRON blockchain and has helped freeze over $100 million in illicit funds.