To catch a crypto-criminal
TRACERS IN THE DARK: The Global Hunt for the Crime Lords of Cryptocurrency
Author: Andy Greenberg
Childhood discussions of morality often devolve to a single question: What might you do if you knew that no one would ever — ever — find out? In the Bitcoin age, a lot of people have tried to test that scenario, in the belief that they could hide under a digital invisibility cloak. They were, as Andy Greenberg details, badly misinformed.
Greenberg, a writer who covers, among other things, hackers, surveillance and the seamier precincts of the internet for Wired, deftly assembles a rogues’ gallery of characters who fell prey to this false sense of invulnerability: drug marketers, thick-necked federal agents, globe-trotting libertarians and (less amusingly) child porn collectors.
The misconception that Bitcoin transactions can’t be tracked has bedevilled cryptocurrencies reporting since its earliest days, and rests on a basic confusion between “anonymous” and “untraceable.” From a privacy standpoint, paying with Bitcoin is roughly like using cash — if, that is, the serial numbers of every bill were dutifully recorded by every merchant. The heroes of Greenberg’s story are the programmers and number crunchers who learn how to assemble the serial numbers, following the money as it hops between digital wallets and creates the trails of evidence that send criminals to prison.
Some of this story, in particular the dramatic takedown of the Silk Road and the capture of its creator, Ross Ulbricht, has been told before. Greenberg has less insight into specific criminal personalities, but that lack is balanced by his level of detail and the absorbing narrative of the investigators. Each key section of the book — the Silk Road story; the dismantling of its successor, AlphaBay; the massive theft of Bitcoin from the Mt Gox exchange; and, finally, the bust of the Welcome to Video child porn emporium — unfolds like a compact mystery.
The protagonists, too, would fit nicely into a procedural. They are resourceful, morally upright, and come with appealing quirks. Who wouldn’t root for Tigran Gambaryan, the hard-working accountant who morphs into a tough-guy IRS agent covered in Greek Orthodox tattoos?
And yet, it’s hard not to come away from the book with the impression that the downfall of the bad guys has less to do with the investigators’ tireless work than with the usual culprit: hubris. Over and over, the big breaks in the cases arise not from painstaking financial investigations but from the most bone-headed of criminal blunders.
Ulbricht, the founder of the Silk Road, made the mistake of including his own email when he was seeking some start-up coding help. Carl Mark Force, a Drug Enforcement Administration agent, tried to open an account with a Bitcoin exchange under a fake identity — then, when he got turned down, came right back and registered under his real name. Another federal agent and an elusive hacker both got caught when they forgot to hide their computer’s internet addresses.
And then there is Alexandre Cazes, the Quebecois entrepreneur who saw an opening when the Silk Road was shut down and founded an even bigger marketplace, AlphaBay, that he operated out of Thailand. Cazes managed to include his email address — Pimp_alex_91@hotmail.com — in the metadata of the note welcoming sellers to his drug bazaar. By the time the police were on his tail, his Lamborghini, astronomical bar tabs and compulsive posting to a pickup artist forum had sealed his fate — with or without the help of the cryptographic cavalry.
At the book’s close, Greenberg reaches for a bigger point, bringing back one of his protagonists, the cryptographer Sarah Meiklejohn, to point out how the tools used to catch criminals might be employed just as easily in the service of mass surveillance. It’s a reasonable concern, but relies on some slippery-slope speculation that doesn’t feel totally convincing.
Yet there is a bigger point to be gleaned here, and it may be hiding, like Pimp_alex_91’s email address, just below the surface.
It’s telling that before Gambaryan more or less happened on Force’s case, he was in the midst of a different investigation — into a company called Ripple that, taking advantage of the crush of interest in Bitcoin, had released its own digital currency. The Ripple investigation makes no appearance beyond the first pages of Tracers in the Dark. You need to turn to Google to find out what happened there: The criminal probe of Ripple ended with a $700,000 civil penalty and pro forma promise to behave. You can see why Greenberg would skim over this — settlements don’t generally make for high drama.
But it feels like a meaningful omission, because, as Greenberg knows, it’s exactly such faint traces that lead down into the deeper story. Ripple has not, in fact, disappeared. It is currently embroiled in litigation with securities regulators over its sale of $1.3 billion in digital tokens. Its investors include some of the best-known names in tech, such as the venture capital firm Andreessen Horowitz, one of many that have ridden the cryptocurrency boom to untold riches.
A billion here and half a billion there adds up to a lot, and much of it will likely be paid for by the less connected and informed. But a glaring truth remains: Compared with some of the big-name investors in the crypto trade, these villains played for penny ante stakes. If you really want to follow the money, the trails to travel down aren’t those that bounce through computer servers in seedy hotel rooms. They’re brightly lit by the billions of dollars in opaque profits amassed by some of Silicon Valley’s most upstanding citizens.
©2022 The New York Times News Service
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