In a decade as a U.S. Internal Revenue Service (IRS) Special Agent, Tigran Gambaryan has seen them all.
From the looted crypto exchange Mt Gox, to the Silk Road darknet market and corrupt cops stealing its funds, to the Welcome to Video child pornography site, to the scam involving the hacking of 130 VIP Twitter profiles, Gambaryan was the man trusted in almost any major investigation involving bitcoin or cryptocurrency. “I’m a dinosaur in the crypto world,” he says. “When I started, Silk Road was one of the only places you could spend your bitcoins other than buying pizza.”
Gambaryan had to teach himself to follow breadcrumbs on blockchains, the digital, obfuscated, but public networks where cryptocurrencies like bitcoin and ether are traded.
Blockchain investigation was a new field, for which the tools were initially few and rudimentary. At the same time, it was familiar ground. “I was a financial investigator. My thing has always been to follow the money,” says Gambaryan. By following this mantra, he made his way to the weakest link in a chain of transactions; often it was an account with a large cryptocurrency exchange, which in some cases could help identify the suspect. “I was one of the first people to start sending law enforcement requests to crypto exchanges,” says Gambaryan.
In 2021, things turned: he joined Binance, the world’s largest cryptocurrency exchange, as vice president of global intelligence and investigations. Gambaryan is now on the other side of the crypto fence, trying to spot bad behavior on the exchange and responding to requests from law enforcement around the world. Since joining Binance, he has been busy trying to track down the people behind SQUID, a cryptocurrency scam named after, but not affiliated with, the hit Netflix series. squid game.
Gambaryan did not take the leap alone. He was just one of a dream team of crypto investigators that Binance recruited from law enforcement in 2021, including fellow Gambaryan IRS Matthew Price, the former investigator of the US Treasury Greg Monahan and Europol dark web boffin Nils Andersen-Röed. Another recruit, Aron Akbiyikian, previously worked as a detective focused on digital crime in Mariposa County, California. “There’s a bit of a brain drain happening,” says Gambaryan. “There is a massive exodus of cryptocurrency expert-special agents who have left government agencies and joined the cryptocurrency industry. Everyone has left.
Predictably, some crypto sleuths have joined a fledgling group of forensics firms, which combine proprietary digital tools and traditional investigative skills to help governments and corporations in their crypto-related investigations. This is for example the case of Beth Bisbee, head of US investigations at Chainalysis, one of the main companies.
Until 2021, Bisbee was a cryptocurrency specialist for the Drug Enforcement Administration. But after helping DEA grok blockchain research — and leveraging his abilities to solve cases — Bisbee says his work started to feel “a bit stagnant.” The DEA was focused on drug-related crime, but it knew that crypto chicanery extended far beyond that sphere.
“I was hungry for more. On-chain analysis came up; it’s a place where I could still support the mission, but on a larger scale,” says Bisbee. His colleague, Scott Johnston, who joined Chainalysis as an outreach officer in 2019 after a career as an investigator with the Metropolitan Police in London, tells a similar story of impatience: “At the Met we faced high profile criminals, but we faced them with the bare minimum of resources and capabilities,” he says. “I was getting a little disappointed with my job.”
But it’s not just investigative-focused companies like Chainalysis that get the crème de la crème of crypto cops. Besides Binance, other exchanges have fully inquired. U.S. exchange Coinbase, for example, employs at least six people with employment histories at places including the Met, CIA, FBI and Lithuanian police, according to LinkedIn data. One wonders if there is anyone left in law enforcement capable of delving into crypto crime or if the only solution now is to turn to crypto companies for help.
Gambaryan says most law enforcement “don’t really know how to go about it” when it comes to probing crypto questions. “Basically, we [at Binance] are there to help them with their investigations,” he says. But he thinks there’s still plenty of talent in law enforcement.
“When I was in government, we did a lot of liaison work with other countries and other law enforcement agencies,” he says. “We have trained many people around the world on how to investigate cryptocurrency.”
This article originally appeared in the May/June 2022 issue of WIRED UK magazine.