Binance’s former IRS agents are trying to keep crypto crime-free

Where do you go to find the best crypto-forgers in the world?

After an ambitious recruitment round, Binance may be able to claim the title. The cryptocurrency exchange is now home to two former IRS agents – Matthew Price and Tigran Gambrian – with years of experience chasing down billion-dollar crypto criminals, both on-chain and off-chain.

Price and Gambaryan joined Binance shortly after the exchange expanded its ranks with a dark web specialist from law enforcement agency Europol and a compliance director from trading giant eToro.

“When I saw cryptography and the fact that you have a permanent blockchain record of all transactions, it really intrigued me,” said Price, Head of Intelligence and Investigations for the Americas at Binance. Decrypt. “A lot of the work I’ve done in intelligence has been using big data sources and combing through them to find leads or sources — and I saw blockchain as the same opportunity.”

Track down crypto criminals

Price is a former IRS agent who also had a stint as a gatekeeper with the CIA. At Binance, he is joined by longtime IRS Special Agent Tigran Gambaryan, who is now the global head of intelligence and investigations at the cryptocurrency exchange.

For those unfamiliar with the technology, cryptography can seem like an ideal tool for financial crime – such is the reputation cryptocurrency often gets in the mainstream media. Price and Shrimpian couldn’t agree more. And they have plenty of stories to refer to.

As an agent in the IRS’ criminal investigation, Price led investigations into Helix, a bitcoin mining company linked to illicit dark web transactions. Helix processed more than $310 million in cryptocurrency until it went bankrupt.

“We reached out to Reddit, we reached out to some forums to try and figure out who was behind the account, and that account really didn’t lead anywhere. Then we really focused on the actual transactions, and the service got a fee,” Price explained.

Then they noticed a series of small transactions that seemed to them as if the official was getting paid for each transaction he completed.

“So by following this thread we were able to get links to identity,” Price said. This convicted felon is Larry Harmon of Akron, Ohio. Pearce explained that he was one of the first people to adopt Google Glass. What led to the discovery of his identity was a publicly shared Google Glass image of a computer screen showing the Helix admin page. (Harmon pleaded guilty and lost more than 4,400 bitcoins.)

Price explained that such seemingly trivial errors are strangely common among paranoid, tech-savvy criminals.

Gambarian has similar stories to tell.

He started his cryptocurrency journey as early as 2011 while working in IRS offices in Oakland and San Francisco. He is one of the main names behind some of the most popular cryptocurrency investigations of all time. His investigations include the 2014 Mt. Gox hack, in which users lost $350 million. He also led an investigation into the BTC-e exchange, whose founder was accused of laundering 300,000 bitcoins between 2011-2017.

Perhaps most famously, Gambarian led the first investigation in which cryptocurrency was traced back to the true identities of criminals in what is now known as the Silk Road corruption investigation. The cryptocurrency criminals in this case were federal agents assigned to work on the Silk Road case, the now-defunct dark web marketplace where bitcoin was used for illicit trade. Gambarian has compiled a comprehensive criminal complaint detailing the actions of the two federal agents that led to their convictions.

Cryptocurrency versus traditional finance

Despite his lifetime of crypto crime, Gambaryan has a fair view of cryptocurrency. “Cryptocurrency, like any other financial instrument, can be used for legal or illegal purposes,” he said.

The main difference between cryptocurrency and traditional finance is the many hurdles that the latter puts in the path of investigators.

“Money launderers have realized that when offshore entities are set up and offshore bank accounts are set up, it slows down law enforcement. As an investigator, you now have to run operations for months to get bank details of various financial institutions around the world,” Gambarian said. “And when you actually reach the goal, the goal disappears.”

“But what cryptocurrency allows us to do is skip all of that,” he said.

“Many of the scanning techniques are the same,” Price explained, because it’s mostly data analysis. “But she also knows how to put this data to work,” he said. He explained that getting support from cryptocurrency exchanges when working on an investigation is key. As former IRS agents, they’ve found cryptocurrency exchanges — not just Binance — very handy, miles away from reluctant banks.

In their new roles at Binance, things hardly look any different from their time at the IRS. They still work in criminal investigations, as they usually do. And this time, they can help colleagues at the IRS.

Between November 2021 and September 2022, the Binance investigations team responded to more than 27,000 law enforcement inquiries, with an average response time of three days.

“This is bleeding stuff. It’s changing all the time. It’s constantly evolving, but I can talk directly to those involved. And then I can use that information to help law enforcement identify and prosecute people who want to exploit it,” Pearce said.

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