Taint (Crypto)

In crypto, taint describes the degree to which a coin or wallet balance can be traced back, through the public transaction history, to a particular address, often one linked to theft, darknet markets, ransomware or sanctioned parties. Because blockchains such as Bitcoin record every transfer, blockchain analytics firms can follow funds from a known source across many hops and estimate what share of a balance came from it. Different methods give different answers: some treat any contact as fully tainting, while others spread taint proportionally or follow funds first in, first out. Exchanges use taint scores in know your transaction checks and sanctions screening, and may freeze deposits with high exposure to illicit sources. The practice raises concerns about whether coins remain fungible, since innocent recipients can inherit taint from earlier owners they never dealt with.