- Crypto exchange Binance has been quietly building out a 150-person investigations team.
- Leading the team are top government agents who helped bring down some of crypto’s biggest criminals.
- They share why they decided to join Binance and how to get a role in the under-the-radar team.
Tigran Gambaryan and Matthew Price helped the government crack some of the biggest cryptocurrency investigations from the takedown of a massive child exploitation network, known as Welcome to Video, to the investigation and prosecution of illicit bitcoin tumbling service Helix.
Some of those exploits will be chronicled in an upcoming book, “Tracers in the Dark: The Global Hunt for the Crime Lords of Cryptocurrency” by Andy Greenberg.
Instead of taking it easy, however, Gambaryan and Price accepted a new challenge helping Binance, one of the world’s largest cryptocurrency exchanges, crack down on crime.
The changing crypto landscape
Now with regulators from around the world closing in on the crypto industry, many of the largest exchanges are shifting strategies by amping up lobbying efforts and securing licenses for regional hubs and operations.
Investigations is one area that Binance is doubling down on, having built out a 150-person team. Last year, the exchange brought on a number of key hires including Gambaryan as vice president of global intelligence and investigations and Price as senior director of investigations.
Both Gambaryan and Price gained their knowledge on crypto crime at the IRS. Gambaryan was the agency’s “go-to” crypto expert through his role as a criminal investigator while Price worked as a special agent in the criminal investigation cyber crimes unit. He also spent time as a targeting officer in the CIA.
“Everyone we’ve brought into this team is our equivalent around the world,” said Price citing other recent hires such as Europol’s Nils Andersen-Röed.
“The company took the approach of, ‘look, we really take this seriously, we really want to not only protect our customers, protect our platform, but blockchain as a whole, because if we’s doing that it adds trust to the space , “he added.
The team of former law enforcement agents and blockchain experts are working to identify and stop individuals who are trying to take advantage of the technology for criminal means.
“Child sexual exploitation is a great example,” Price said. “I do not think there’s anyone on the planet that is not willing to help with that.”
Other activities like counterterrorism and fraud, particularly against vulnerable populations like the elderly, are also activities they are looking to put a stop to.
“We developed the techniques to identify and take down the worst of the worst,” said Price and Gambaryan in a blog post. “We even led the investigations targeting some of the same bad actors that those in the media insinuate Binance is responsible for enabling.”
Ahead of the game
Despite some of its challenges, the pair believe Binance is leading the way on investigations.
“As far as the other exchanges, I do think they are starting to follow that model. I do not think they’re quite where we’re at,” Price said. “And unfortunately, for them, I think the crypto investigative community is very small. Most of the good folks have already been picked up.” A “huge exodus” is occurring from the government into the private sector, Gambaryan said.
Binance’s investigations team is already working with law enforcement and educating partners in the space.
The overall volume of illicit transactions relative to actual cryptocurrency transaction volumes is around 0.15%, according to data from Chainalysis.
Tracing illicit transactions
“When I started my career, I started out in Baltimore and some of the drug money laundering or fraud cases we worked, we’d have to literally sit there and surveillance in neighborhoods like ‘The Wire’ and try to watch people hand to hand cash, “Price said. “Now, I can sit in front of a computer, and I can trace those transactions along the blockchain.”
In the past, Price and Gambaryan would need to essentially “create their own blockchains” by recreating a flow of funds based on records from banks. Now, with all these transactions publicly recorded on the blockchain, analysis tools can help investigators track the money faster.
“The crypto tracing is 10% of the case, the rest is knowing what else to do,” Price said.
At Binance, an investigation can be triggered from internal work, where the agents are seeing transactions from suspicious clusters, requests from law enforcement and then finally, requests from customers.
“The call I mentioned this morning, it was actually a finance customer that was the victim of theft,” Price said. “And we worked to quickly identify where the funds were, we were able to restrain them and we’re working with law enforcement to get that returned to our client.”
Securing a role in the team
Despite already having 150 individuals on the team Binance is continuing to hire at pace, with over 100 roles open across its security and compliance teams.
It’s not necessary that these new hires come from a background of law enforcement.
“Some of the best investigators out there in this space have been doing it for two or three years,” Gambaryan said.
Kids coming out of college could be just as equipped for the role as a 25-year veteran in financial crime because they’ve grown up with cryptocurrency and blockchain technology, Price said.
“My perspective is that the two most important things for anybody in investigations are work ethic, you gotta be willing to sit there and do the boring, mundane work that any investigator anywhere in the world has to do,” Gambaryan said. “And the other one is intellectual curiosity.”