How to Tell if an Arkham Entity Label is Incorrect
The most critical way to tell if an entity label on Arkham is wrong is to look at its appearance—labels with a purple dashed border and a question mark are AI predictions, while those with a blue verified badge are official Arkham verified labels. You can also use the entity page's cross-referencing and on-chain activity logic to spot suspicious labels. Understanding these points will help you avoid being misled by incorrect labels.
Step 1: Check the Label Appearance – Purple Dashed Border vs. Blue Verified Badge
This is the most crucial step to determine the nature of a label. Arkham labels come from two sources and look very different:
AI Predicted Labels (purple dashed border + question mark)
Made by Arkham's AI model based on probabilistic on-chain behavior patterns
Appears with a purple border and a question mark icon
These labels have not been manually verified and are not 100% accurate
Arkham Verified Labels (blue verified badge)
Confirmed by the Arkham team or vetted community contributors
Shows a blue verified badge
These labels have undergone multiple verifications and carry higher confidence
The SharpLink incident in November 2025 made the distinction clear: at the time, a wallet was labeled as SharpLink, causing market panic about "SharpLink dumping ETH." After the SharpLink CIO denied it, Arkham clarified that the label was "a prediction from the AI model, not an Arkham verified label." The AI-predicted label was marked with the purple border and question mark. If users knew this difference, they would have immediately recognized the label as unconfirmed rather than taking it at face value.
After Arkham's update in May 2023, custom labels (private labels created by users) also appear with a different color and dashed border, visible only to themselves, clearly separated from official labels.
When you're done: You can accurately tell whether a label is an AI prediction or an official Arkham verified label just by its appearance.
Step 2: Cross-check on the Entity Page
If a label appears to be an AI prediction, but you want to confirm further, go to the entity page of that wallet:
Navigate to the entity page corresponding to the label.
Look at the "Entity Predictions" module—here you'll find all wallets that the AI predicts belong to that entity.
Compare the verified wallets with the predicted wallets to see if they are all listed under the same entity.
In the SharpLink incident, Arkham's response clearly stated: wallets verified by Arkham for SharpLink would appear under the SharpLink entity, and the mislabeled wallet was not among them. If the wallet you're checking does not appear in the "verified" list on the entity page, its attribution is questionable.
When you're done: You have confirmed whether the wallet appears in the "verified" list of the corresponding entity.
Step 3: Reverse-verify Using On-chain Activity Logic
If a wallet's label seems suspicious, you can verify it with on-chain behavior:
Check the address's interaction partners: For example, if a label claims a wallet belongs to an institution like IOSG Ventures, but the funds in it have never interacted with the institution's publicly disclosed addresses, the label might be problematic. In May 2025, IOSG Ventures was falsely reported to have "deposited UNI and COMP to Binance" due to an Arkham label error. The founding partner of IOSG personally denied it, and Arkham itself marked the relevant label with a question mark (meaning unconfirmed).
Verify whether the label matches on-chain activity: If a label says "a certain fund's cold wallet," but the address frequently interacts with decentralized exchanges, while the fund publicly states it only trades via OTC, it doesn't add up logically.
Arkham's official documentation clearly states: labels are objective records assigned "based on verifiable on-chain behavior," not subjective inference. If on-chain data doesn't support the label's claim, the label's credibility should be discounted.
When you're done: You have checked whether the address behavior matches the public information of the entity.
Risk Reminder
Mistaking AI predictions for official verification: This is the easiest pitfall. AI predicted labels are not 100% accurate, and Arkham itself admits that "probabilistic assumptions can never be perfectly accurate." Before making any significant decision, always check if the label has a blue verified badge or just a purple question mark.
User-created labels can be screenshot and spread: Users can create private labels for any address. When these custom labels are shared as screenshots, people who don't know might mistake them for official attribution. When you see a label screenshot circulating, first check whether it has an official verification badge before believing it.
How to Confirm Your Judgment is Correct
After completing the three steps, you should be able to give a clear conclusion: if the label has a purple dashed border and a question mark, treat it as an AI prediction, not a basis for decisions; if the label is in the "verified" list on the entity page, you can trust it. If a suspicious label is spreading in the community, the safest approach is to verify on-chain yourself—enter the wallet address into a blockchain explorer and see if its actual behavior supports the label's claim.
