Intricate schemes, high-stake crypto transactions, international networks of criminals. It sounds like a scene from a movie, but this is what financial cybercrime investigators do every day at the world’s biggest crypto exchange.
Operating in the digital realm, they track illicit funds and navigate complex webs of deceit to uncover the perpetrators behind anonymous transactions. They do not advertise their real names or faces but silently and persistently guard the financial system against the bad guys.
What exactly do they do, and what is so special about their profession? Jane Davis and John Smith, two financial cybercrime investigators at Binance, agreed to a sneak peek into their line of duty. At the request of investigators, both their names have been changed.
Virtual Crime Scenes
“Remember those movies where you see the wall full of pictures and cord lines connecting them? I’ve done this in the police. It’s the same in crypto,” says John.
Together with Jane, both ex-police officers run financial cybercrime investigations at Binance, connecting virtual dots to reveal the criminals behind money laundering and other illicit schemes that involve digital currencies.
Today they are solving virtual puzzles and investigating crimes on the blockchain. They figure out the hidden connection using analytical tools and sometimes simply a piece of paper to connect the dots. And the crime scenes they look into are virtual.
“It’s a lot of work. Some victims lose all their live savings. And you feel the pressure of solving these puzzles quicker, bringing justice, and helping the victims quicker,” explains Jane, adding that no day is the same at the financial cybercrime investigation unit in Binance.
The cases they solve vary from the quick ones that require identifying a single suspect to long-term and complex investigations, focusing on bigger illicit networks behind the fraud schemes or financial pyramids.
Finding new connections between separate puzzle pieces and identifying unknown suspects is thrilling. No two days are ever the same.
Curious Puzzle-Solvers with Backgrounds in Law Enforcement
Jane and John moved into the private sector after spending years serving in the police.
She has a master’s degree in criminal law and criminology and is experienced in tracing cryptocurrencies as part of financial cybercrime investigations. He has been investigating financial crimes for a decade after gaining a bachelor’s in engineering and a master’s in criminal investigations from the Dutch Police Academy.
Both investigators agree that it’s not only hard skills such as technical knowledge of blockchain, forensic tools, and understanding money laundering methods that are essential for investigating and analyzing financial cybercrimes.
Investigators need to be able to think critically to identify patterns and anomalies in crypto transactions and pay close attention to detail to ensure that no evidence is missed. Analytical skills and communicating clearly are equally important for an effective investigation.
Being a good investigator is not only about a university degree, insist Jane and John. It all starts from the love of puzzles and the natural curiosity that leads to becoming educated in the field.
“Onboarding departments in financial institutions offer roles where you can train specific skills of puzzle solving. There’s also investigative work done there. You always get cases where there’s no solution or explanation of what happened,” says John.
The investigators name banking institutions, crypto exchanges, crypto companies, and law enforcement as the best places to gain initial experience in financial cybercrime investigations.
Apart from these, one must be passionate about new technologies and have the urge for justice, as investigators always seek to help victims.
“As part of Binance, we’re always looking at removing this prejudice that crypto is just a space for criminals. We want to clean up the space and that drives us too,” explains Jane.
No Hiding in Vans
The daily work of financial cybercrime investigators is dynamic and fluid. They solve complex criminal puzzles, with tasks including research, analytical work, and critical thinking.
According to the Binance investigators, they don’t do the undercover work. You won’t find them sitting in a vehicle waiting for criminals to show up. This is what law enforcement agencies do.
Financial cybercrime investigators operate in virtual crime scenes and follow the digital traces on a blockchain. Sometimes they proactively “hunt,” mostly when reacting to different referrals and monitoring suspicious transactions.
“In Binance, we have different investigative roles. Sometimes it’s just analytical work,” explains Jane. “And then, it’s a lot of collaboration. Both with your teammates because we all have different experiences and views on similar things, but also with external partners. For us, it’s law enforcement and other private companies. It’s a big part of the job.”
Being a hub between the cryptocurrency exchange and law enforcement, investigators regularly meet up with the officers, regulators, and prosecutors when solving complex money laundering cases or other illicit financial activities.
Such meetings help to bridge knowledge gaps that many law enforcement agencies still have about blockchain. “We try to educate them about technology,” adds the investigator.
Then Jane and John, like any other officer or investigator, write the reports documenting what they found and how they arrived at their conclusions.
Here, one must have skills to translate the technical aspects of blockchain-based crime into understandable and readable reports, says John. Otherwise, nothing will emerge out of what the investigator has found.
“Most prosecutors are not knowledgeable about this specific system. Later in the courts, they need to make decisions based on our findings. So it’s really important that we’re able to translate that into something understandable.”
The money laundering schemes from ten years ago are different from today. Crime methodologies and technologies develop quickly and require investigators to keep up with them equally fast to understand what’s happening.
According to the investigators, understanding blockchain technology is the only way to identify the red flags and risks that arise when transferring or obfuscating value.
There’s a lot of information available online, from Coursera to YouTube, so anyone can educate themselves about blockchain and spot suspicious activities.
“You can mirror those examples that they give you. Sometimes you see people on YouTube talking about investigating whales. Follow their steps and see if you could do the same. That’s what I have done myself,” reveals John.
Back in 2013, when he started, no software tools were made to trace or show things graphically. He had to draw all the connections by hand, make exports from blockchain dot information, and formulate the next steps.
Jane further admitted that investigations could be conducted using free and publicly available blockchain exploring tools. She used to do this during her days at the police. As of today, when commercial tools do the transaction tracing part much easier, the whole investigation process still involves a lot of manual and analytical work.
They both agree that understanding the technology is still the key to success. According to John, his early knowledge of blockchain and previous experience investigating traditional money laundering crimes have helped him understand the criminal actions on-chain.
“If you are new in this system, it can be hard to grasp what’s happening. Therefore, having a network and reaching out to the investigators with these experiences could also help you to develop the skills. Because this is becoming more and more complex. It’s easier to ask your network,” he says.
Ask for Feedback on End Results
Revealing the missing piece of the criminal puzzle and cracking the complex schemes they’ve created is one of the biggest rewards of their work, say both investigators. Another one is getting the whole picture and actionable results.
“The feedback from law enforcement, your other colleagues, that it really helped them what you did. That motivates me in my work,” confesses John.
However, both agreed that getting the feedback is tricky for private-sector investigators.
“This is the trickiest part of being in a private company vs. being in law enforcement. We don’t get that thrilling moment of the end result, be it an arrest or bringing justice to a victim,” says Jane.
Although they are often part of bigger criminal cases, the private sector financial cybercrime investigators see less of the whole picture and have less interfuse with the suspects.
“We always encourage law enforcement to give us feedback about how our information turned out or helped. We don’t need this out of curiosity. It’s just that it helps us to tailor our service to avoid any possible risks. It also helps us to better assist the same law enforcement and help our users better,” adds Jane.
Seeking Greater Education and Trust
The work of financial cybercrime investigators may look fancy and thrilling from the outside. But it also comes with its drawbacks.
“I wish there would be more trust from the regulators,” says John. “We are now in the private sector working for the company, but it would be nice to see more trust in what we’re doing.
We need to develop knowledge, compliance, and regulation rules to get there with the regulators to build the industry standard. Trust is needed for that.”
Seeing the victims losing their life savings is always heartbreaking, adds Jane. Her biggest wish is to see everyone better crypto-educated and more critical to avoid falling victim to scammers.
“I would love them to think before they act and to assess whether something is too good to be true.”
Learn more about the CFTC lawsuit against Binance:
Binance Lawsuit: CFTC Chief Doubles Down on Accusations Against Exchange
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