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Fighting crypto crime starts with fighting the many misconceptions that have accumulated around it.

Like the idea that cryptocurrency transactions are untraceable and anonymousfor example, and that the blockchain industry doesn’t care enough to investigate bad behavior or take action to prevent it.

Neither is true, said Matthew Price, head of intelligence and investigations for the Americas at Binancethe largest crypto exchange in the world.

“There’s the perception that exchanges don’t care, that crypto is the Wild West, and no one wants to cooperate with law enforcement — and that’s just not true,” Price said. Decrypt.

Price, a former IRS agent who also spent time as a targeting officer with the CIA, is one of several recent government recruits to join Binance’s growing investigative team, including longtime IRS Special Agent Tigran Gambaryan, now Global Head of Intelligence and Investigations at Binance.

Crypto crime fighters

When Price and Gambaryan were with the government, they regularly collaborated with crypto exchanges, including Binance, to share information and stop crypto-related fraud.

Now that they’re inside, they and their colleagues are using their expertise to train law enforcement agencies around the world on how to handle crypto crimes, including everything from money laundering and nation-state hacks to ransomware and romance scams.

Binance has hosted crypto and blockchain technology workshops for law enforcement in the US and Europe, Canada, Brazil, Argentina, the Philippines, Singapore, and Sweden, with future workshops planned in Colombia and Mexico.

“As a former law enforcement officer, it’s heartening to see this kind of willingness to collaborate between the public and private sectors,” Price said. “Collaboration and two-way information sharing is the only way to combat these things, given the speed at which technology and criminals are changing.”

follow the money

Although the number of cryptocurrency-based crimes has down about 15% since the start of the year– a bear market will – crypto exchanges and law enforcement are not resting on their laurels.

Criminals are “always looking for the most efficient ways to do their job,” Price said, and the fact that cryptocurrency is streamlining and facilitating cross-border transactions is a double-edged sword.

“There’s the perception that crypto is the Wild West, that no one wants to cooperate with law enforcement – and that’s just not true.”

Matthew Price

what is a ransomware attack other than the 21st century version of mafia extortion? what is a pork butcher diet if not a modern adaptation of the Nigerian prince’s email scam.

But if the means have evolved, the motive is the same in the majority of cases: money. And it’s easier to track the money when you have a permanent record of everything that’s going on.

Crypto transactions can be traced on the blockchain, giving investigators a a boost in the fight against crypto crime.

Nowhere to hide

Money that disappears into a Swiss bank account is not public. But everything that happens on the blockchain is.

If you went to Bank of America and asked them how exposed they were to criminal markets, they couldn’t tell you, at least not definitively, Gambaryan said.

“But I can go there now and see exactly how exposed we are to these entities, which is unprecedented in the financial industry,” he said. “We teach investigators and regulators how to take advantage of this and we demystify cryptocurrency to eliminate the image people have that it’s anonymous.”

“Nobody, including Binance, wants criminal activity on the platforms.”

Tigrane Gambarian

Forensic accountants can use tools provided by blockchain analysis companies like Chainalysis and TRM Labs to see how crypto moves through the blockchain, then link it to information recorded by entities like Binance, including IP address. of a user and transaction records.

Even so, catching cybercriminals remains a cat-and-mouse game, which means the industry needs to help law enforcement get stronger.

“Nobody, including Binance, wants criminal activity on the platforms,” Gambaryan said. “We are empowered to do what we can to stop it, but we are only part of it.”

Build blockchain expertise

The challenge is that too few law enforcement personnel have the blockchain forensic expertise to conduct a crypto-related criminal investigation.

But experienced investigators like Gambaryan, Price and their colleagues, including Jarek Jakubcek and Nils Andersen-Röed, both former Europol agents who now lead intelligence for Binance in APAC and EMEA, respectively, can educate detectives. and regulators on the mechanics of cryptocurrency and how to identify and deal with crypto cases.

The training offered by Binance differs depending on the market and the sophistication of the audience. In Canada, for example, where law enforcement already has some experience with cryptography, training is more focused on topics such as advanced investigative techniques and preventative measures, whereas in other countries , it makes sense to start with the basics, like an introduction to what kind of information Binance has and what steps you need to take to freeze an account.

Over time, the more investigators who know what to look for, the cleaner the crypto will be for everyone, Gambaryan said.

Beyond the introductory sessions, Binance is also sometimes called upon to provide more specialized training.

The team was recently invited to a conference in Brazil where they were asked to explain how cryptocurrency can be used to aid in crimes related to human trafficking. While at the IRS, Gambaryan worked a business this led to the 2019 takedown of the world’s largest darknet child sex abuse material site, which was accomplished by tracking bitcoin payments. The site administrator was arrested and 24 children were rescued.

“It’s a real-world impact,” Gambaryan said. “If someone tells me Bitcoin is bad, I always keep in mind that if Bitcoin wasn’t there, those kids would still be abused.”

Make the difference

There are also many examples of the real impact Binance workshops have had on law enforcement around the world.

In a recent kidnapping case in a major Brazilian city, the perpetrators demanded a large ransom in cryptocurrency. One of the investigators in the case had gone through Binance’s training program and was able to track down the criminals and figure out who they were. The victim was rescued and the kidnappers prosecuted.

Binance’s investigations team is also frequently contacted by people it has trained to ask for help or advice on a case.

The week after hosting a workshop in Canada, Binance began receiving calls from the Royal Canadian Mounted Police and regional and provincial agencies seeking consultation.

“From there, we’re able to help victims recover funds, and it’s the same story everywhere we’ve done these presentations,” Price said. “Based on the number of inquiries we’re getting – which has skyrocketed – it’s definitely making a difference.”

Article sponsored by Binance

This sponsored post was created by Decrypt Studio. Learn more on the partnership with Decrypt Studio.

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