Andy Greenberg, author and journalist at Wired, recently joined Dennis Fisher on the Decipher podcast to discuss his new book Tracers in the Dark: The Global Hunt for the Crime Lords of Cryptocurrency, which tells the stories of the people who hunted the operators of several major dark web markets. This is an edited and condensed transcript of their conversation.
Dennis Fisher: For Tracers in the Dark, we’re talking about the Bitcoin world, the real deep dark cyber crime underground of the early 2010s, when things were totally chaotic. What made you want to dig into that?
Andy Greenberg: I only started covering state-sponsored hacking in the way that became this book Sandworm in late 2016 when Kim Zetter left Wired. That had been her beat and I really did leave it to her and she was incredibly good at it. After she left the editors at Wired basically asked me to take over some of that beat and asked me actually to do a big takeover issue on cyber war where the whole issue was going to be about the topic of cyber war . So I went off looking for a cyber war story for them and that’s how I sort of came to the state-sponsored hacking beat. In the end I actually felt what I found was so urgent. This story about the cyber war unfolding in Ukraine at the time that I asked them please don’t wait on this to make it a takeover issue just do this magazine feature that I’m handing you, and that’s how I began to tell that story for Sandworm. That magazine feature published the week that NotPetya hit and so that was when I was kind of off and running. Once it was clear that NotPetya was the work of Sandworm, that they had carried out the worst cyber attack in history, then I could see that there was a book there. But sorry that was all just to say that all of that was a very deep detour for me from a subject that I have covered much longer actually which is the the dark web and the you know the cypherpunk world of the use of encryption for trying to carve out this space where the government can’t reach and that’s something that I wrote about in my first book, which was about Wikileaks and the cypherpunks and it’s just a long-running interest I’ve had. In 2011 I wrote the first magazine piece about Bitcoin, the first print magazine piece anyway. I saw it at the time as part of this phenomenon of this cypherpunk movement of people trying to use crypto tools way back when crypto meant cryptography to evade government surveillance. It started to become used in the Silk Road just a few months later. I was off and running covering that world.
Dennis Fisher: I remember those early days of Bitcoin and I remember being completely dismissive of it because I thought this was the silliest thing I’d ever seen and I talked to a bunch of the cryptography experts that we both know and they said, There’s a lot here but I don’t know if it’s going to actually have any value. The structure of it makes sense but will it be useful as monetary value? No one knows.
Andy Greenberg: I felt the same way back then in that first piece that I wrote eleven years ago.
Yeah I write in that piece this thing Bitcoin has appreciated wildly in value from 50 cents to $1. I mean just the fact that bitcoin went from 0 to 1. It seemed it could just fall off a cliff again any day and that’s part of why when I was writing that piece and I tried to buy about $40 worth of Bitcoin which would have been 40 Bitcoins back then. And there was a bug in Mt. Gox and it didn’t work. I gave up. That was in part because I had no interest in investing in Bitcoin. Not just that I’m an idiot, which I am, but also that I wasn’t interested in Bitcoin as a kind of store of value. I was interested in the ways that I thought it was going to unlock this new world of crime and anonymous behavior online for good and for ill and it definitely did do that. People including me really believe that Bitcoin was anonymous. Untraceable digital cash. Which turned out to be the opposite of true and that is the story of this book.
Dennis Fisher: What I didn’t know was in the earlier part of the book. Some of the law enforcement agents that had gotten in trouble in the early days, essentially stealing Bitcoins and transferring them to themselves and going down that whole dark road, I had no idea..
Andy Greenberg: I sort of backed into all of it. It was around 2020 that I started to see that Chainalysis, this cryptocurrency tracing company and the only company that I really knew at the time whose whole business was tracing cryptocurrency, I started to see them being thanked in one Department of Justice announcement after another and these were major busts and takedowns and seizures and and so I started to reach out to Chainalysis just thinking this is an interesting company. And it was. It was actually only after I met with one of the co-founders Jonathan Levin that I began to learn from him just how many of the major cases of the last decade they had been involved in and that included the AlphaBay case as you mentioned. The takedown of the biggest dark web drug market ever. And this Welcome to Video case where hundreds of people were traced through their cryptocurrency payments and arrested for being part of this child exploitation network. Chainalysis were the ones who told me about more of the prosecutors and federal agents who had carried out these cases and they could sort of just help me identify the lead agents in a bunch of the cases and that’s when I learned that the real sort of Forrest Gump of this story. That’s kind of a rude way to describe it but he was just there for every twist and turn of these cases and so often just there in the key moment breaking the case was Tigran Gambaryan. this IRS criminal investigator who I had actually met before. We once sat on a panel together where he was arguing cryptocurrency was traceable and I was arguing that it wasn’t and pointing to things like Zcash and I thought I was clever and obviously he was right and I was wrong. But I met Tigran but I didn’t know that he had been the agent involved in this bizarre case.
I followed the silk road takedown so in the wake of the massive bust of Silk Road in late 2013 where the first dark web drug market was torn offline by FBI and DEA all these agencies together. Tigran was the one who kind of did this post-mortem on the case and found that there were two corrupt federal agents, a DEA agent and a Secret Service agent, who had enriched themselves by stealing from the Silk Road, stealing Bitcoins and extorting Bitcoins from the Dread Pirate Roberts and selling him inside law enforcement information about the investigation into the silk road for Bitcoin. I actually knew about those cases too and I’d written about them but I didn’t know that those two agents had been identified through cryptocurrency tracing, that their dirty money was traced on the blockchain to prove their guilt and that’s the part that I’d never heard before and I didn’t know that Tigran had done it.
Dennis Fisher: Yeah I remember in the early stories that I was doing on you know bitcoin related cyber crime payments and that kind of stuff and the Justice Department was just getting into it. Cryptography experts said, just so you know, it’s definitely traceable. There are people that know how to do this. We don’t know if the government knows how to do it. But there are people who definitely know how to trace this.
Andy Greenberg: It’s kind of embarrassing almost how long it took me to have this to have the epiphany that cryptocurrency tracing was going to be this incredible story and an incredibly powerful investigative technique. In part because I had written about that research and at the time, back in 2013 I wrote about Sarah Meiklejohn. I knew Sarah Meiklejohn who was this researcher at University Of California San Diego who had been the lead author on this seminal paper where she proved that you could trace cryptocurrency, and I had actually in my reporting interviewed the Dread Pirate Roberts and I had also for a kind of sidebar on that piece, tried just buying a gram of marijuana from each of three different dark web drug markets. So I actually asked Sarah to trace my drug deals and she did it. I mean she proved that she could find my illegal deals on these dark web markets. So I knew this all along but I still told myself and I think a lot of people still believed, if you make mistakes you can get caught. But if you’re just careful, if you just take a few more precautions than I had done for instance in my experimental drug deals, then you can get away with this.
Dennis Fisher: It’s the opposite of perfect forward secrecy. It’s backward shitty secrecy. Now that we’ve got this aperture into what you’re doing, we’re going to go back and trace all of that and figure out where all this stuff goes.
Andy Greenberg: Exactly. Yes, yes, that’s wonderfully put.
Dennis Fisher: I’ve watched a billion true crime documentaries and read all these books and you know that’s just kind of the thing I love, and as I was reading your book in every buildup to one of the takedowns, whether it was AlphaBay or whatever, I was like, if you just get out now just turn left instead of turning right. You don’t know what’s coming for you. But they never do. They never do. Absolutely.
Andy Greenberg: I appreciate that you identify more with the criminals than with the investigators.
Dennis Fisher: Hundred percent.
Andy Greenberg: It’s just so interesting to see the hubris and the ideology or whatever, the finality of these drug lords and kingpins, but it’s just the way that I ended up telling this story. So much of it came from the investigators.
Dennis Fisher: Yeah I mean that’s kind of the nature of the way that you’re telling these stories right? History is told by the victors. You get the information from the people that are still around to tell the story.
Andy Greenberg: It’s probably not a spoiler for this audience to say that Alexander Cazes, who was the creator of AlphaBay, which eventually grew to be 10 times the size of the Silk Road. The biggest dark web crime and drug market ever. He died in a Thai jail cell. I knew Alexander Cazes’s name. He was dead and there was going to be no way to truly hear his telling of the story.