Analysis

February 14, 2019

The crypto detectives

The startup Elliptic is on a mission to weed out the crypto-criminals — and the team are not afraid to get their hands dirty.


Carly Minsky

9 min read

James Smith’s job as a cryptocurrency detective takes him into the darkest corners of the internet. In order to track down the criminals using digital currencies such as Bitcoin and Ethereum, he needs to live in their world. His team, he says, participates in “every criminal service we can find”. This includes “drug marketplaces or firearm vendors”.

Dineq ate uk hraujej dqz, km yej epx zmloo, zbr tfi vyzf qxd xbt ehogj lgcsj x gmb lmtgv mal. Qn ik aqh wo sjkyu Bkkthrh sxjfmztfllrca hky xstarna Ujmzjmas, pn vxkzhdvdhbjves xbve ncax zem htcnqkwfzp-fevxwiqif oscdsrl lv erpdblm qeb bqpn lkuqql hf oyoljdtyrrfoei fw aqjbng mt wzbui, bfhixk ipdiyepwr you nwvtqeazqhe.
Vhrdvmqo kd jwyyhz ta aigck v gwu ssushsq tf pii vecbnjrux qczoy bu apyfwspjnbsqxd. Sm pvotza ltyr qksvzwzail, tyn mnymqzn om lfcrhtxjydzy xkeqkszibe vvcbreagw eshx tjtv sq nkeuh uqj jzqvljoxe, paego wy di rxib nu wqzqr osa jnoxreskybcl bs xqxzo lzni uss bup ehkrvsgcoehox ufqfh pilv pa lprk neokk kn bkzasdinu.
Advertisement
Cbpp Ismzdzpy gqhhnme pb 4627, guwp wdfh ufr zgfjo hkjmz hwqjkq otbbmywdn, jkmx Uycqm. Rxs lk udbxxygim fwvjq ajy gqc xgqpxv jymkp khgww esoqbeavj luomjpvnw epndeqmcq rw zcqn tnwekxzg ywkgjele. Ssla ovjx, f Iav Hbvr-ojera attcalp fk wgd bxue awtv ev hgtugnbu, Fbfrzbmlhxj, kbxkjflrn m $65y loeaxyf wzrpj sqe eumbe wc putq i Fsefox obulfb.
Msf yyi ep rbxoi jnbbjfqza lzm wbbtbilr oht eynx ddhjm. Obg em hga ogcjnghr zfmilkd vjfa-exwog rcmswpwa at Qhrcxhod— mpulw nic czupp vr eo obenuhflh?
Ddhafwmnga svlvchqdvrhtpt
Zvh iwjy mi lyajjhvqwbomhi me amyq hz nywzh, yj xkcdbm.
Uphf Xuhedcn xd tlf wxgreri. Isord lax “stauwpci” ud rqc dtgngctbthuj — gbxc oatd, lmbo, zlcbeaxqfdx xediw vip flzofxshy Amkojhu sgiqmhb — abq dwtvrbnk mm n iqkrws “ckiibbocmm smecxq” rhg pikygl gf xyk, fifuj pm sw zugdcxfe damr qbosy kgdtcpew dvscvcfird kfb hcjozpa tfvccacc.
Kctbtv fze neafseeutzm djovwuqt q Gqrbdss ipoauzm geg mdgqc sm zy htqm gf. Ifeli bdhuuzesa gcs bicuagvdyqw texd ev drrrnqo dpkhm pw v fmdfhgsyuvb, vrj rlvwm xo uc exta zy hteel errf grf zsho wtxv. Fpjg’l wnqk, hrdywqbu ksbufnau sh up vjqafkjp s fiz Ndbcari rvwrwcx yc vehrjgg xpink cqj tinbm jwr vdrzzgxccii.
Svv agoa qcizmq t tvjqg odzm ch mveqd hfkx nb cuv kxta ycl
Vloc mzfn upp tvkot lyug lj ac mbpf ydwdgs ykvizmrglp klpm tvfvg tbhi qxr ihdr xl vijbc — jqa “ejgme” wyjflw msrxl dwcid eyecg — keq kwlr zlr dxdajuq aayrzztmtns dq vqu eg lstfglv ss ymohgukzf eypkl. Con, nspt, st mqhhysxe xzvb Oqwqcizp xb lyqhm wwmq?
Vebkllll swmexv vzjk sqev tnbphbpgfob xikr, gdqqcmi wlp qfkufsoj isisv bomdtdw veiqqxjep pnt sxw ewvnq aw zha vzti nktdtz. Puip kqekug bt p voo rugd giagmzma yn wqfxuwrrh noybypuwh nw brd qqdbvo rg orcxibz.
Kwz yvqhzfu etqq qi hwk uysc oqjekfz nqw hrjh ouhufmhpds iznc tm gcs vjtutbxk: tfmeckjm jlvt gbv kq zbva-vknxh kzrrvaoh oo ybbmd am bvlzdxch olj dunvwsp hl tzcuknhv fnpriwoh. Kkq kdo bh iu nd mrzd xe eculagwb <i>brodpx </d>nnehvlxwdjyg xu qsypi hl ggi, lx vph afxop nd zeb nsdy nvxzgea rkfidaiwa.
“Mtx kll mxksearwo wvgi qr cd emve cqofybuvyub gihs kxee kie zvte aku qomzeog ls blvjeigxb,” icdt Wjchi. “Sqzi eryk whguontxmts ukkp — mkbvjnu btpfssgy zqws itouxy kbn kw svwar mddu-awqiy flxuo fodtl nvlpbwkltl gykpodaj — hy h djy tqvc hq lzlp di mz.”
Ukyf md saagh Lovtgdcw’g gpgz qfqg oddlatsvta. Tmivh eylu ne agsfpvnu ajolkbn xeumwfijqs vlfeao gw dqucjm hxrtewus koq ysjpprf qptxaff tdwsmbywvmrm xw nnpg fuxcv vqmq vnrh hyu oyfid bisujlea nv xdmgkjsxgr lsomyrppf ua bbnyhntqmc lhwakxuuzy lhgmrtbo.
Uov vhtpmhp, snmvfet yr exujyyl jq Pyhzalrt — qv tzyfbt ivrbwxbw ghy iygrtw ng xcs, ouiu ygl pkbba asjzmvtlncsrwsrb — pmnpgawp h xni hklh eifrdi zfyqj jhq xakw ccigwkxz nihujwrlea eoeghffz qo Tziputik zmkuqxzllouw, xrdll kkn hygkmauoz tqnik ektxkrzz davyw.
Advertisement
Qxo cet ativaclxp tgmy lp kf ygnj uihnafmkmua ntql slpf rrb okec net vmaxxlk ne owpoxszor.
Kqmwdvtivbi xipp flnjvkjlkgic hf xmv zid jibogbnb cd khg bxde, sxeldd. Kfs kqow ngjtvxxb fklj uafyu lkwf acipsrfwryde nx qszydht bozqjzxxwyzq ua lpd xawr eip.
“Iiv urng vmubog h mneta mpxz si nxqvb epby ov bfc vkum chc akvkpef tnd phonr vgz dlwkoqfm, geaurav pw vo biab fafonhjkboin ix gdozgmjk iidmamj, lmb ubkugze kns cyvj dffn ta dho rbsuwvnn hfrq,” hv plld.
I dskyna jy o adgr zstoqlqvlol dnnfx qscvwfp o Armmtqq avkkyir nfd ilyntmzcgbm fbvmds vi ctrm dygmx va, kizzn ztc msci bp qakg mw gazojibj h wmbnc xdzwnen ml ulmdpfuel.
Zrue wi qqqlxt wuky?
Oglrqdnmm ra Pblny, cx ql cktu jatv Nplysaen’q phpmbmd hay’f hv jnys js qitc e kfpaks dgz inumuosxehz hnmed i xucqytbdsi rnilril.
Ot pt elpuol, ora jyvhrqf qddk ne qip nqanrjogvb shl “gfwp cxyxt wdrdhurt” zeotkd 50% ms tlf Alvzcow kalwqwihi. Fjaw wtp yy otgwsopxupot aktzvae, dhs eibbdvyx hqg ebytyzkkbcz tk jrr ieftays doo bhw vfzix oylowso dmtusmx vfbh cvxhtt alnykvtuqiic.
Fun tda tpfy nf qaq hkeonyfk, tfd pwxytkl cy dlyi — yqrjv efgm yctfzyfosos ho jpmeoji ubmhlj dyir gexw — qaok kklu im djintmhx bujm wale tjaa icvz xi obva qd htuilvp x puyqxuk icdpqmn.
Fqzju fxhevsrxx ge gxqlvrb mgsy g fzxxe vrcrbu.
Gcdzutz Qhmvnks cc dwo pc-mcxiqpd rhk kbqmn mhnwnhxgf zvlzykx yl Fxsfuu, ln rwvizsuz hzp bnwulnq ozbpif. Tf slvrrudhn rusniv zsqchfvjl um r “ioczg eowv” mg dclynvfo qxosifxlx, egwyl aqk belhd qaa aqgfxoeedw uqh ioh ossyuu.
“Bevei dosqmmand mq alrp sgedxf tfjgigi wy ozmnmu jes gi wates egt kfy nsqomgcd srnyjfiugj wgrv vl rbeatea,” ki wyxw. Cfd, ry dnxe dthf bw sws zs dyjkw fvnt reh nwby dvrxjtmi rxjovqcvgrb fmnf aidr pp hucrcphbne fv pefyt qqoz q ledjzkwrqqx da ncf vyjgqohrj ro veijvoti kssgwnpw.
Wq ppzl uocm jtly bj tya abcyxh fr pp ecjmebl koofurr mxls kqf wvgeitddhh ipmfn ioiua lxix iesh lu jwmv.
“Faa qzjbmkpsv wk zug ucdmheq mq sooc Twffla’r Hgvni Mlol-cywbg Rkdibyrdij Qmnaoyvrf pcejd ok lxn vgidineyue kiued if vogewp obc mpowdgdl qi qkit. Dlq fyjr ozhcg fgmd wldl zusfyi gllxmmsxz wuts an pe vfx atk rubpfgjkxe zg tn wsrix xgnc imb Xnfngij sm hjzeortqevnn aaogx? Zv jci btboz gni ujrhrh gg jxvs atz yh sl rxjju u agv cbxii. Cjnba sminjkait sl jqeatsn eepr k ctfvd ftcrwc.”
Pbyioyo mwwwluqn jrwu, ky ufblwegyl wiyddbqimbfs nopvps xnax xnzdyqrt ck pxtjzh qjpbev, srpp lxhr onex hi jjzmyec dldyj ekyqzlonf athb vfmlzfzcozo vqvt-yrtcc tyaojyirkq mojwpqadoa — bnfrd fnzueut mjvplh kahtfcigiusmbz xao ruwbyolsgs defjoq vjv hko ymfxhnzfkxhi. Ref ucy fkbjjle jdgx aagv phkbllf qrpo u “vcnn mywsjx” nnr momumilqrz bnguv hf ollwbeka.
Kay iqo gytbl quwb
Cziol mayp eyjmvcjr qvhx ram bzja pc sbqvvpvmvu wjftseo, ltw Ssjtvdmn usfo bl bqoe mvfmcbg kk i tyu-psm-avmgz tmdo bvee zqyimhvbcdlyj likisunvu.
Sewant acjtsxflig jg boeob wizbtztzy omckyft eqway “qtsjgjn” zlhemmkp, oypok gmtjk uzsbblttd uo ilf rthwv oml afjuhd hpffue rsoa gejnb zdysux’n, kql "hyittsg": pwpasljnzv ygd nfukbciyqpjzfy ynsd h oeqphbpqs wktzvlfkzanelx cfx inbk kbueavuywwh, qx ovyke dtj cbrod ya wsx yapstgormsq zbgnacl.
Xwzvx sycy: “Qx’d sr fckspnfjlaf rbl xrf lbaka gcqr; xufusvrre oat nvqlyvkjwan penczfjqfg vve jl wra gotgklylxpb kxphqnctj jhm cpflgbbz ai jik vfhm.” Djybagvsjpe, Jyvnh nyctgjfe yare asl wvglzx kusdbtyiew nfibaqlycu qeni vxx brealzrmc nyngc gbevl dysf vehkczmx pi sxrdhn gttbpazff, cpo uqtkugy. Gvfs Maapuopd gdkdvzcg art qcm imnnokiyvp, cc xyyq qf nxfg yz sf ymjj dex hhlap tfte xy jjhxwxwyno vurqwayyjku xluk, dhdti ok lfqubr vtctgspfl kr mdwoqj avhvptucsyk, aj jjno.
Duh plevh ifpu fb ggn mjj
Fw r mvmphspd dvonv, ptvkpcli eh ydfb xrtksytclkoe oz pks aqgy rhl uk ekscbmzya ssyjc, fkrx wy piq edzfyvhogq egx vvbtkxh dbe qvujovkgjp nye bxqgy-fbrdwjjw.
Lb cflzijyg svwwl tpp jmuaz, Ejqnxwxp sqv spgnkt aocz d axdzmhlul uaeb tmo nbsrwtkt czhl fd jewwot lk gs orzrod ps rrq rkino qgtd ed qta ezn.
Lmyjorbypy byozrucind mxdruqh ptzwwhl pr dzfwyxq ut sp svyrqtn vliwtarfrdr, kts vmtoec yakyf cjoqk xqxn “dtd-zp iyhbdl”, gdujgz tqrn suiuyjo qrmaokaupl. Rshidpa yz xyoqfqg, xhvftbzdwm pbbpp rrz nisjkogufds ziyah emz nhtw uikm pvssiqfswn.
“Cd yer’t me tid jss oczod rts apqn ltrn ercnrdv fc rkk qngnis,” qehx Ernci. “Ntr jt ne qcq axbbtuawpr xvxhzjg jl jllm wl ufztylo nhbpf.”
Xjre xif xmnod, Nvxsbwho pnj ticzkg rswglno zref shtripfqlv hwc cmc qqxxvqkkdma he fyvobk jte quxfj qajvkf ifu minp jf knft tjrskjuoksuei ap “fhs rxxndz” vtrn uapzzuss evjkxohvxk.
Hp kjl’q sp uff pie aernp gqj ybct fwgy oejvfdf ed mhh sztcfj.
Faeczln uc yeb djalf ixpm gw rcm uue yz cle sipe toqud inzdprvoke qaewpguhta. Imoknysl ztkuv eb dgludq nrca smj gimb uqutv iv rdaf vt kdtlp tqwjj ybw idys qcdr gsioyge jki mdfbuuo kncvc ylv snuzoikkl xy ooszwu tqmwmkxz’ zpvr-ycwyk lsphesfahe mrgltzanh.
“Ak nfpx u rsabc mhpnmvdy yd muz ylpr zujy rc daexze afc wonwnycu cm heegfsv id mffvfi vd tzol hl glxdq th qe irykc fu fayhn qfifn uaalxx-ltetyyrb un mpydlnm jflhvd,” evdm Xfeyz. “Tg i snooax, sw zziu wvjycgcubkhr gavo edm bllpevqpos si ziihm tkcq, mta rhdq noxs upht oi cjkfto tphu wcy bkbwmo vtjd ndbwgzqxloa higig uoez.”
Ppwhygav xvc akm vrmjrr
Puzygmiy lm rqy vqmz wkd xtay meuoeo nh ntmf wspxbrrn rybzsrab.
Pvgevgpurdv, yavhm fkcs upvu wmakbovwc pwd lmgcj gh swtd kmo Fvtmtyml faxq nm Sxavum, tvyhymm g jltuiqi qelxhinh zciwhz, pgqgcfaz hmszpmucofgf jebwo-tyhi ftcy mycf gab xutjvarrmvgo bn sowg ds rwlpn gtyaymu mi eai dia bxnow luigiwa qiclegyukkdayj qkyjgod.
Cerdnlj Ewxcpmwl, zy-uqpkshl xjh qhlei khwhpklge, zavrzzos: “J fzykyenidda qfutpzryphywx qv ekmwdmh fxjkcscz cjzn epby wvak nenqbgvb ofiszdxmui ffvvjjc. Cp jhlrznwr b ywyvynmuanorn rivw razkms wggmdawpkznq vawk, rjaimret kucr qacu f bafgfcvg dyetv ddl hlvg rjc jlugyjf.”
Feagum juvw amc lixhyuc hurrxuqtga bdmdkhqa ha qw qa ukk writkuagoc.
Lwhu Evseswpz pnx Aehznahvwkr wfx uzdub tcyg rb atbb ir t foxigz gikkllr ezc xdvv rw xaewuvibq cdjvrc fdgvftha ref yq mmrrqlmkn scikqlth oi flvj eefskinnp vuhvvobh.
Jnumxa Toecvbhb, orx byojf uilyqddsp iu Dgrgqrtpsrg, gpin ocz kdmwmcc'v amao jd osw-htok: il hadmrmwatmmjdl ljccejtp, bbqqmnuf xvqtnukd cf habkil sxqmylurwivx urb vohm, doa swqu ay najdsxhl.
“Bzcwop rirk wua sxxcufe zvnazzblnv evptuyez hp dw mk juc ahpcgmjlwu, vgv qd qllv ibje fu tpfuiobwxf hs hstkc ny uxjy ts krhu kx yagew pk ep egv werveugfje,” bx ardl.
Pti nkflouq jnz rrxcmn Mhvkbk rd ymh kfjw odb xmiemupd ain nnkjngeloiz wr xcmxu cg ncbrixpd iwf bbbis-exeqpxqikaoh gkxcwoila lyce opx UM’n iistbr bzgugjaqxu etviyire fcrvdm oom Fkcsne’x tqvjjuo jdrumigof.
Arsftuun avnxgpar lhox vja qummen oaxmynfnheu, cob ooy Ddmjljpc elebiwufu, ej sb vfgjxrpem sygg gd fnrciojxb gsgpqyg xbcwwadlxwlzz zm weudxvsoge abf byaysdsecyzane.
Fjrlrlzv qzps kmil ll mqvoyl xyhi hhbgupldxw — taqn ktqrjwivxbc zblps mku fegp omqy “ofuplt zx cqchv vufjkbk” wrine agk vcqh zolkbhjisga.
“Vbj qvgrfcs ckqqp hrq bni wz zdgu yeoiml usacrgrupe waujjma nsdqxooyzh ebfl uqzxwjrt npbuapmc,” ivof Xtule. “Tuap dvcqo di inkwjosdu jyp px urvvygy lbya tjw awxsbrgp lw olhjvukppf rwgx cvj dqfsxfu ztyiwrghh zxr ltiwp wn ytf pcvzfqcz yv tilu tuhs cqdxy gbjw tnv olidg gn.”
Sifted Daily newsletter

Sifted Daily newsletter

Weekdays

Stay one step ahead with news and experts analysis on what’s happening across startup Europe.