Tracers in the Dark: The Global Hunt for the Crime Lords of Cryptocurrency

Book written by Andy Greenberg

Book review by Ben Rothke

Bottom Line

I recommend this nonfiction book for the Cybersecurity Canon Hall of Fame.

Review

Fort Knox houses a large amount of the United States' official gold reserves. You can drive up to the gate and ask to see the gold, but that's as far as you'll get. For obvious reasons, the US Army doesn't want tourists near trillions of dollars worth of gold.

But the Federal Reserve Bank of New York has a much kinder, gentler approach. You can get a tour of the gold vaults. And, in fact, come within a few feet of tens of billions of dollars of gold. You might think they are crazy to allow the public to come so close, but they have numerous layers of security to protect the gold.

But when it comes to online currency, there are virtual vaults with hundreds of millions and billions of dollars of digital gold, often with inadequate security. And where there's poor security or where there are large amounts of cash, there will be adversaries.  

In Tracers in the Dark: The Global Hunt for the Crime Lords of Cryptocurrency (Doubleday), Greenberg has written a fascinating book on cryptocurrency. While there are countless cryptocurrencies, the book focuses on the most famous one, Bitcoin. The book focuses on the mechanics of crypto, and while it has revolutionized financial services, it has spawned a massive opportunity for illicit activities.  

Suppose a gang would be crazy enough to try to storm Fort Knox. Even with all the planning, only a Hollywood scenario would see them emerge victorious. But the equivalent in the digital world is much more feasible and has happened many times. 

For example, Mt. Gox was a Bitcoin exchange based in Japan. In 2014, hundreds of millions of dollars of cryptocurrency vanished. Making the attackers quite rich and the account holders with nothing to show for it. 

Bitcoin was initially touted as being completely anonymous. But Greenberg shows how research by cryptography and security researcher Sarah Meiklejohn, then of the University of California, San Diego, and Chainalysis, a blockchain analysis firm, poked holes in the claims that Bitcoin is entirely anonymous. At the same time, many of those who sold illegal goods on the dark web shielded themselves from this perceived anonymity. It was the work by Chainalysis that led to countless arrests.

In the book, two early cryptocurrency figures are highlighted. Ross Ulbricht, known online as Dread Pirate Roberts, created and ran the infamous darknet website Silk Road from 2011 until he was arrested in 2013, and Alexandre Cazes, who ran the other infamous darknet site AlphaBay.

Both Ulbricht and Cazes were exceedingly bright, yet incredibly arrogant. And with the myriad security controls they implemented to ensure anonymity, both were caught using innocuous law-enforcement techniques.

So can there be a completely anonymous cryptocurrency? In 2013, researchers from Johns Hopkins University created Zerocoin, a proposed privacy extension to Bitcoin. That eventually morphed into a standalone protocol named Zcash. Matthew Green, one of the founding Zcash scientists, notes that privacy is a really hard problem.

Green has seen too many claims of future Bitcoin upgrades or add-one that would solve its anonymity issues, but yet another innovation ultimately defeated that in blockchain analysis. He remains hopeful that his Zcash will eventually get there one day.

There are countless benefits to anonymity, both in communications and banking. There is also a dark side to it. One area that has thrived is child pornography. The book details the work of IRS Special Agent Tigran Gambaryan and Chris Janczewski of IRS Criminal Investigation (CI), whose work on blockchain analysis resulted in the takedown of a Welcome to Video. That was the most significant cryptocurrency-funded child sexual abuse material (CSAM) marketplace anyone in law enforcement had ever seen.

The early days of cryptocurrency were filled with the irrational exuberance of the complete anonymity of the cryptocurrency. Many of the founders had equal hubris and were oblivious to the underlying flaws in their cryptosystems. Greenberg tells a fascinating story of some key players and how they were ultimately hoisted by their own petard and came crashing down.

Greenberg's story encompasses technology, international law enforcement, financial forensics, greed, and more. While his technology experience is deep, Greenberg has written a remarkable work that will undoubtedly be of interest to those both with a technical background and not. This book is perfect for a long plane ride, as it is engrossing and hard to put down.

The antagonists in the book were certain that various levels of anonymity would protect them and keep their crypto secure. They added additional layers of control, yet still were brought down. This is a fascinating story of technology in general and Bitcoin specifically. And it is one of the most interesting and compelling books you will read this year. And a worthy candidate for the Canon.