I wish I had a way to review this book without reading last year’s “Tracers in the Dark” for the first time. While Tracers talked about the people involved in investigating various cryptocurrency-based crimes and those early researchers who made tracing possible, Carlisle tells many of the same stories, but in a less engaging way. The facts are there, and when they talk about the same cases, they fit together well. But Andy Greenberg’s novel Tracers makes those cases stories about people, while Carlyle depicts the facts without character development that I wouldn’t have realized was necessary or useful in a book about money laundering had I not read Tracers first.
As for the facts? I’ve learned a lot, especially by feeding my ADD nature by following the interesting footnotes – over 350 references provided! Thank you!!!
In the first part of the book covers all the obligatory cases: Silk Road, Mount Gox, etc.
What makes this book great, and far superior to Tracers as an educational resource in this regard, is how money laundering works in Crypto. Mixers and Coinswap are well explained, with many related cases explained such as Helix and Bitcoin Fog. The importance of regulation and how regulators follow cryptocurrency developments is a major topic of the book. From regulating exchanges, to Bitcoin ATMs, to privacy wallets like Wasabi Wallet, and the debate over whether privacy wallets can or should be regulated.
The attempts by the Financial Crimes Enforcement Network (FINCEN) to introduce more regulations and the protests against them (in my opinion) are particularly interesting.
Also depicted is fascinating coverage of the history of OFAC cryptocurrency sanctions, from Suex, Chatex, Garantex, Bitzlato, and ransomware linked to the Iranian Revolutionary Guard. And the history of ransomware’s development, which wouldn’t be possible without the large, anonymous currency transactions enabled by cryptocurrency (and which FinCEN is trying to prevent!)
The final part of the book does a great job of explaining how Ethereum has opened up a number of possibilities through smart contracts. Carlisle does a great job explaining Ethereum and ERC-20 tokens and how to create DAOs, DEXs and DApps using Ethereum smart contracts with more on the DeFi system including how Bridges work. It also explains NFTs and how they are also charged by ERC-721 (and misused by thieves, scammers, insiders, and money launderers.) This was the best introduction I have read to this entire ecosystem. great work!
The Bitfinex hack, which opens the book, put 94,643.29 BTC from 2016 under the microscope, untouched for six years, until a move in February 2022 that led to the arrest of Dutch and Razzlekhan and the seizure of $3.5 billion, as if it had been set up. As the climax of the book we also return to the story from the opening chapter. The intermediate chapters helped us understand the mechanics now revealed, but again, they were facts without characters, which is good – I was just ruined by the tracker clashes.
The final act feels like something forced upon it by an elliptical marketing department. (All the other major players in the cryptocurrency industry are doing the same thing, so I wouldn’t choose Elliptic. It was the first cryptocurrency tracker I ever used!) The fiat industry is on the line of “Oh, but less than 1% of cryptocurrency transactions are illicit ! It was a disappointing ending to a decent book. No one will ever convince me that the vast majority of cryptocurrency transactions do not involve a “transaction” at all, but are indirect trades on an unimaginable scale designed to manipulate the value of cryptocurrencies to encourage investment and enrich homeowners and businesses that rely on cryptocurrencies for their livelihoods. .
Great content – perhaps even as a companion text for a course on cryptocurrency crime at a university (yes, my wheel is turning!) especially with the rich depth of articles, policies and issues referenced. But for a fun crypto crime story, I’d still choose “Tracers In the Dark.”