“That was the only path through this darkness,” says U.S. prosecutor Zia Faruqui. “The darker the darknet gets, the way that you shine the light is following the money.”
In "Tracers in the Dark," Andy Greenberg, a senior writer at Wired, takes a historical look at what he calls Bitcoin’s “siren song: the promise of untraceable money.” He begins by carefully tracing back through the history of law enforcement’s crypto investigations, and finds their very first success. It was 2014, and IRS special agent Tigran Gambaryan was investigating a DEA agent suspected of having stolen bitcoin from Dread Pirate Roberts, the pseudonymous founder and administrator of Silk Road, the world’s first darknet marketplace, a website where users could sell and purchase bitcoin and drugs, protecting their identities with an encryption technology called Tor.
At the time, most people who used bitcoin believed it to be anonymous, an untraceable payment method, akin to using unmarked cash bills.
“Oh, shit,” Gambaryan remembers saying when he found the evidence that showed the corrupt DEA agent did indeed steal millions in bitcoins from the infamous creator of the dark web bazaar. “We broke Bitcoin.”
This is the book’s first wow moment, and it comes at the end of Part 1, which is mostly spent setting the stage and explaining the technology behind Bitcoin and how it was used to facilitate online drug trafficking. The book truly takes off in Part 2 with a series of stories featuring law enforcement agents from California to Bangkok chasing dark web drug kingpins on the web, on the blockchain and in real life.
The beat-by-beat tale of the takedown of AlphaBay, then the largest dark web market in history, is perhaps the book’s most memorable story. It is told from the beginning, when an anonymous person reached out to a DEA agent in Fresno, California with a tip about the identity of the AlphaBay administrator, to the end, when Thai and American agents lure Alexandre Cazes out of his apartment and arrest him while also being able to seize his computer open and unlocked. This was key because the agents were worried they wouldn’t be able to get evidence from it if it was shut down and encrypted.
Much like Silk Road, AlphaBay was hosted on the dark web, and facilitated the sale and purchase of illegal goods, mostly drugs and hacking tools. The investigation into AlphaBay culminates when around 20 agents from the DEA, FBI, DOJ, IRS and DHS travel to Bangkok to arrest Cazes, who was the founder and administrator of the site. In a scene that would otherwise be hard to believe, some of the agents were hanging out in the lounge of a luxury five-star hotel, when Cazes himself parks his Porsche at the entrance and strolls right past them.
“It was like seeing a ghost,” one of the agents remembers thinking, as some of his colleagues panicked. In the end, it was all a coincidence, Cazes walked past, and there was no confrontation. The Thai police, under the supervision of the feds, eventually arrested him a few days later in a well-choreographed operation. A week later, Cazes then died by apparent suicide in a Bangkok jail.
Greenberg managed to interview an impressive number of law enforcement agents, who helped him tell the story of these high-profile investigations from the inside. It’s a true detailed behind-the-scenes look at high-stakes police operations, such as the AlphaBay takedown, the investigation into the “world’s largest” child sexual abuse website called "Welcome to Video," as well as the takedown of Hansa, another dark web market that was briefly run by the Dutch police in an unprecedented sting operation.
The Hansa takeover-takedown combo resulted in several arrests all over the world, and — more importantly — spooked the whole dark web illegal markets ecosystem, showing that even the biggest markets could be a sting operation run by the cops.
One of the big ideas that "Tracers in the Dark" really drills into the reader is that it’s not just that Bitcoin actually isn’t anonymous. But it’s also important to remember that law enforcement investigations take time. As it turned out, that anonymous tipster who cold-emailed a DEA agent in Fresno about the identity of AlphaBay’s founder had the right man. But the investigators still had to pull all the threads and fingerprints left on the blockchain and the internet before going after Cazes.
"Tracers in the Dark" shows that there is hope in stopping drug dealers, dark web market kingpins and child abusers given the sheer number of successful busts, takedowns and arrests, from Silk Road to AlphaBay. And it’s all thanks to the immutable, persistent nature of the Bitcoin blockchain, the perfect place to follow the money.