Historical crime has left a proverbial black mark on the cryptocurrency ecosystem-why?
2022.11.16 10:16
Budrigannews.com – Historical crimes have left a black mark on the cryptocurrency ecosystem, with millions of dollars in hacking, fraud and fraud cases grabbing headlines around the world.
Several research reports have highlighted the use of cryptocurrencies by illegal means, with varying degrees of severity, since the inception of Bitcoin in 2009. While this is falling and flowing, cryptocurrencies are still perceived as a means to facilitate money laundering, terrorist financing and other serious crimes.
The prevalence of cryptocurrency-related crimes will inevitably lead to the development of better tools and services for tracking and tracing funds on different blockchains and cryptocurrency exchanges. criptomonedas.Si while companies such as CipherTrace, Chainalysis and Elliptic provide companies with monitoring and analysis tools, some of the major players are using them to identify illegal transfers on the platform. We have set up our own research and follow-up department.
Binance is among them, and its exchanges operate in various jurisdictions around the world. Its global presence requires greater supervision of the operations carried out by Binance’s Research and Information department.
Cointelegraph sat down for an interview with department head Nils Andersen-Röed and senior manager Jennifer Hicks at the Web Summit in Lisbon to discuss the role the team plays within the organization and the broader cryptocurrency and crime landscape.
Industry experts
Both people have extensive experience in this field. Andersen-Röed rose to the rank of Politie in the Netherlands and headed the Dark Web unit from 2016 to 2018. He then worked for 3 years in the expert team of Europol Dark Web before joining Binance.
Due to Hicks’ military background, she worked as a cryptographer in the United States Navy from 2010 to 2016. Then, as a precursor to his current position at Binance, he moved on to a professional investigative job as a Senior Cybercrime Officer for Chain Analysis from 2020 to 2021.
Gareth Jenkinson from Cointelegraph attended the Web Summit in Lisbon on 11/5, 2022 with Jennifer Hicks, Senior Research and Information Manager at Binance, and Nils Andersen-Röed, head of the department.
Andersen-Röed oversees the Europe, Middle East and Africa regions and is responsible for managing a wide range of compliance processes. This includes monitoring transactions and storyboards, and escalating more serious issues:
“In my team, I have a former law enforcement agency, so we all work on criminal cases ranging from ransomware to traditional cases with cryptocurrency elements.”
Hicks heads a special investigation unit and has more specific directives throughout the global team. His team leverages expertise in terrorist financing and focuses on transnational and extremist-related crimes:
“We receive requests from all over the world. It could be Europe, the United States, Islamic terrorism, as well as anything with extreme events that may be related to encryption.”
Hicks’ department also handles cases related to child abuse cases, violent crimes, and penalties.
Busy workload
Binance, like many other exchanges, has a dedicated team to handle general monitoring requests and inquiries for personal information. More complex or urgent inquiries are assigned to specific departments.
The global reach of the exchange means that the Andersen-Röed division is busy, usually processing applications in an average of up to 3 working days. Given the large number of applications processed in 2021, it is not a useless feat:
“In general, the number of cases is very large. I think for the case team, for example, last year we had something like 27,000 applications that were processed in a very short time.”
This does not include what he describes as “active work.”This could include, for example, an example of a hack in which the team seeks exposure to Binance and researches and acts at the exchange level,” he said.:
“If you see or notice that a particular law enforcement agency in a particular country is interested in it, ask: “Can we work with them?””
Collaborative efforts
Binance’s Investigations team has also been involved in larger projects relating to fraud cases, terrorism financing and ransomware attacks, which Andersen-Röed described as top priorities for law enforcement agencies.
The transparent nature of blockchain networks also means that there is no shortage of work for Binance’s investigative team. This calls for a predefined scope in order to manage workloads and investigative efforts, given that some illicit movement of funds could eventually end up on Binance’s platform:
“If you see a hack, even if it doesn’t go to our platform, we can still trace it through blockchain. So, we quite often have to define up to what point we will investigate. It could be that a hack at some point will reach our platform or users will try to launder money, and then we can quickly take action.”
Binance’s Investigations team also has outside agencies approaching it for assistance. Hicks joked that the department receives requests “hourly” but the reality is that their expertise is sought after and influential.
Working through hundreds of law enforcement requests is a sizable task, but Hicks highlighted her team’s efforts to help guide and support investigations that might be outside of the exchange’s sphere of influence. This includes offering more than just information that has been requested, by collaborating on thought processes and analytical approaches:
“If we think that there’s a better avenue for them to get the answers that they need in their investigation, we’ll walk them through that. It’s really like a holistic process. It’s not really just standard field tracing and all that.”
Investigations are a two-way street as well. Binance relies on commercial tools and threat intelligence platforms to keep an eye out for crypto-related crimes and illicit movement of funds, as Hicks explained:
“The threat intelligence industry is chock full of great counterterrorism analysts that I used to work with in the past. So there is a network there that we rely on in order to gain a complete picture of whatever that investigation may be.”
A guiding hand
While the top global law enforcement agencies are well-versed in tackling cryptocurrency-related crime, Binance’s Investigations team also supports those that are still learning to deal with these types of crimes.
Andersen-Röed admitted that some countries and agencies are great at what they do, while others are still learning about the sector and lack the tools and expertise to tackle more complex tracing and crypto-related incidents:
“We also try to we do a lot of active outreach for law enforcement to basically explain what we’re doing but also how they can investigate. And it helps us because the quality of professional will improve.”
The pair’s Investigations team forms an important but smaller part of Binance’s compliance and security infrastructure. Some 500 people make up the department of the exchange that ensures its stability and security.
Nevertheless, the impact of the Investigations team can end up helping secure the wider cryptocurrency ecosystem by going one step further than just identifying and deactivating Binance accounts being used to move illicit funds.
Andersen-Röed stressed the importance of the reactive and proactive work in tracing cryptocurrency and flagging potential criminal elements:
“We try to take action against the accounts and reach out to law enforcement so they can investigate and hopefully arrest criminals. We try to keep our platform safe, but we also try to keep the industry safe.”
The cat-and-mouse nature of these efforts will likely continue, but Andersen-Röed believes his team’s efforts to make the industry safer will prevail in the long run. Collaboration and outreach remain an integral part of the exchange’s efforts to weed out nefarious players.
