‘Tracers in the Dark’ presents a fun crime story — and lesson in privacy

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On its surface, Andy Greenburg’s caller book, Tracers successful the Dark: The Global Hunt for the Crime Lords of Cryptocurrency, is simply a modular transgression story. Fans of existent transgression podcasts volition bask the crypto mentation and get a spot successful the Federal Bureau of Investigation van arsenic United States national agents way down criminals done their crypto transactions.

The archetypal communicative recounted is that of a crooked Drug Enforcement Agency cause who stole funds from the online cause marketplace Silk Road. It besides addresses the hunt for Dread Pirate Roberts, aka Ross Ulbricht — Silk Road’s founder.

Ross’ operational information was beauteous good. He utilized Tor for everything. He utilized an encrypted laptop that locked itself erstwhile it was closed. He didn’t stock idiosyncratic details. But successful privacy, each it takes is 1 mistake. He was yet undone by 1 tiny slipup connected an online forum erstwhile helium archetypal started Silk Road.

The takedown of AlphaBay was an adjacent much blase operation, told done a operation of modular investigative techniques that besides harnessed evolving tools developed by crypto forensics firms including Chainalysis and Elliptic. I won’t ruin the ending to that astonishing communicative successful this review.

According to Chainalysis data, Silk Road accounted for astir 20% of each Bitcoin enactment astatine its highest successful 2013. Silk Road conducted implicit $435M worthy of transactions, peaking astatine $40M successful the period of September 2013. pic.twitter.com/veOdmlb3oe

— Chainalysis (@chainalysis) November 5, 2020

A much disturbing conception reveals the takedown of Welcome to Video, a kid pornography tract wherever galore users simply sent their Bitcoin (BTC) straight from Know Your Customer-compliant exchanges.

The publication is simply a amusive work arsenic a existent transgression novel. It’s besides a utile teaching instrumentality for operational information connected the web, peculiarly for caller crypto users. The maturation successful crypto usage successful the past 2 years has been exponential, facilitated via caller wallets similar MetaMask that became disposable connected phones 2 years ago.

Since you nary longer person to beryllium a tech adept to usage crypto, galore caller users are little delicate to accusation privateness than the hardcore techies that dominated crypto successful the aboriginal days. This publication should service to aftermath them up to the request for crypto privacy.

Related: My communicative of telling the SEC ‘I told you so’ connected FTX

It’s important for privateness advocates to survey transgression forensics, not due to the fact that we privation to assistance the atrocious guys but due to the fact that the tools employed by the authorities against despicable radical successful this publication volition yet beryllium applied to each of america by some governments and snooping neighbors alike.

As 1 example, thousands of radical whose crypto was stolen by Sam Bankman-Fried volition soon larn 1 injustice of the taxation codification successful that theft is not deductible against superior gains. If unfortunate accusation is leaked successful the FTX bankruptcy, the Internal Revenue Service volition apt usage that accusation to spell aft bankrupt victims of the fraud to retrieve superior gains taxes owed connected their insubstantial gains. Chainalysis’ tracing exertion volition assistance them bash it.

And with immutable records of transactions existing connected the blockchain, your privateness practices vie against crypto forensic exertion yet to beryllium developed.

The publication is much blase than the flashy rubric would suggest. Crypto-native readers volition beryllium relieved that the writer takes attraction to research a second, much nuanced magnitude of crypto surveillance technology. He presents the views of privateness and Bitcoin advocates specified arsenic Matthew Green, 1 of the founders of Zcash (ZEC), and Bitcoin proponent Alex Gladstein.

After recounting Chainalysis’ galore victories, the writer closes by noting the acheronian broadside of its technology. A speech with the laminitis of Chainalysis is recounted, during which hard questions were asked astir enactment for authoritarian governments. When asked whether helium is definite its merchandise won’t beryllium utilized to surveil mean citizens and oppress quality rights protestors, the Chainalysis CEO’s responses look to way disconnected into obfuscation.

Related: Treasury officials would person done much for nationalist information by leaving Tornado Cash alone

The publication dedicates aggregate chapters to the diligent enactment of crypto privateness student Sarah Meiklejohn. Her aboriginal enactment processing clustering techniques to hint Bitcoin transactions helped recovered a thread of crypto forensic and privateness scholarship.

That instauration was the enactment connected which Chainalysis based its aboriginal models, and her assemblage of enactment and others successful that vein yet helped crypto privateness tools specified arsenic Zcash, Monero (XMR) and Bitcoin CoinJoin wallets similar Samourai to evolve. The epilogue notes that erstwhile offered a presumption astatine Chainalysis for her enactment founding the tools it utilizes, she declined.

She notes her interest implicit however Chainalysis’ interaction wouldn’t beryllium successful catching atrocious guys but alternatively would beryllium utilized much by fiscal institutions to “de-risk” successful a dependable erosion of fiscal privacy. She observed, “Then it gets overmuch sketchier, right?”


There’s anticipation for fiscal privateness yet. One cause featured successful the publication notes that the claims of Chainalysis and instrumentality enforcement that they tin hint Monero don’t clasp up. And obscurity is it adjacent suggested successful the publication that anyone has the exertion to hint Zcash-shielded transactions.

J.W. Verret is an subordinate prof astatine the Antonin Scalia Law School astatine George Mason University. He is simply a practicing crypto forensic accountant and besides practices securities instrumentality astatine Lawrence Law LLC. He is simply a subordinate of the Financial Accounting Standards Board’s Advisory Council and a erstwhile subordinate of the SEC Investor Advisory Committee. He besides leads the Crypto Freedom Lab, a deliberation vessel warring for argumentation alteration to sphere state and privateness for crypto developers and users.

This nonfiction is for wide accusation purposes and is not intended to beryllium and should not beryllium taken arsenic ineligible oregon concern advice. The views, thoughts and opinions expressed present are the author’s unsocial and bash not needfully bespeak oregon correspond the views and opinions of Cointelegraph.

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