S&D E17 - There’s No Such Thing As Crypto Crime

In this special episode of Seize & Desist, our host, Aidan Larkin, sits down with blockchain intelligence specialist, author and Asset Reality co-founder Nick Furneaux for a behind-the-scenes look at his second book, ‘There’s No Such Thing As Crypto Crime’, and the challenges of writing it over the last two years while balancing work, family, and building a house. Nick shares his journey from leaving school at 16 with no qualifications to becoming one of the world’s foremost authorities in crypto investigations, having analyzed over $20 billion worth of crypto crime and trained thousands of investigators globally.

Aidan and Nick also discuss the growing challenges for law enforcement, the role of AI in fighting scams, the rise of organised crypto crime, and why education and better training are essential for tackling the evolving world of cryptocurrency.

‍Timestamps

02:00 - Nick’s background

06:00 - Nick’s first experience with crypto

14:00 - Lessons from Yap Island: How Public Ledgers Work

16:00 - Why investigators must understand crypto

18:00 - Why so many scams use cryptocurrency

25:00 - Understanding the appeal of Bitcoin ATMs

33:00 - The challenges presented by AI

38:30 - Building a future of accessible crypto education

Resources Mentioned

• There's No Such Thing as Crypto Crime: An Investigative Handbook : Furneaux, Nick 
• Investigating Cryptocurrencies: Understanding, Extracting, and Analyzing Blockchain Evidence: Amazon.co.uk 
• The world's first crypto auction: Asset Reality's origin story 
• Bitcoin: A Peer-to-Peer Electronic Cash System 
• Sweden pays drug dealer £1m after seizing his Bitcoin 
• Operation Shamrock
• Billion-dollar cyberfraud industry expands in Southeast Asia as criminals adopt new technologies
• https://www.linkedin.com/posts/aidan-larkin-29810781_bitcoinatm-moneylaundering-activity-7259916571886694400-AUpI/   
• TRON, Tether, and TRM Labs Establish First-Ever Private Sector Financial Crime Unit to Combat Crypto Crime | TRM Insights
• Virtual Asset Transfer Fundamentals | Asset Reality Academy  

About our Guest

Nick Furneaux is a leading blockchain intelligence specialist with over 20 years of experience in computer security and forensics. He is the author of ‘Investigating Cryptocurrencies’ (2018) and ‘There’s No Such Thing As Crypto Crime’ (2024), the only books focused on investigating crypto-related criminal activity. Nick also serves as a Blockchain Intelligence Expert at TRM Labs and is the co-founder of Asset Reality.

Over the course of his career, Nick has contributed to high-profile investigations in fraud, murder, terrorism, and child protection, focusing on live data acquisition, volatile data analysis, and the role of cryptocurrency in criminal activity.

A sought-after speaker at global conferences such as SOCEX and ACFE, Nick regularly provides training to governments, law enforcement, and corporations worldwide on advanced forensic techniques.

Disclaimer

Our podcasts are for informational purposes only. They are not intended to provide legal, tax, financial, and/or investment advice. Listeners must consult their own advisors before making decisions on the topics discussed.  

Asset Reality has no responsibility or liability for any decision made or any other acts or omissions in connection with your use of this material.

The views expressed by guests are their own and their appearance on the program does not imply an endorsement of them or any entity they represent. Views and opinions expressed by Asset Reality employees are those of the employees and do not necessarily reflect the views of the company. 

Asset Reality does not guarantee or warrant the accuracy, completeness, timeliness, suitability or validity of the information in any particular podcast and will not be responsible for any claim attributable to errors, omissions, or other inaccuracies of any part of such material. 

Unless stated otherwise, reference to any specific product or entity does not constitute an endorsement or recommendation by Asset Reality.

Transcription

Joanna Summers

Welcome to Seize & Desist. I'm Joanna Summers, SVP of client relations at Asset Reality. I'm currently at Heathrow Airport returning from Seize:London, our first conference dedicated to asset forfeiture. In this special episode of Seize & Desist, our host Aidan Larkin sits down with blockchain intelligence specialist, author, and Asset Reality cofounder Nick Furneaux to discuss his second book, There's No Such Thing as a Crypto Crime. And I can tell you from Seize:London this week, there is so much excitement around his new book. Nick shares his journey from leaving school at sixteen with no qualifications to becoming one of the world's foremost authorities on crypto investigations, having analyzed over twenty billion dollars worth of crimes involving cryptocurrency and having trained thousands of investigators globally. Aidan and Nick also discussed the growing challenges for law enforcement, the role of AI in fighting scams, the rise of organized crypto crime, and why education and better training are essential for tackling the evolving world of crypto cryptocurrency. Before we jump into the conversation, we have some exciting news to share. Asset Reality is proud to introduce our virtual asset transfer fundamentals (VATF) certification. A practical hands on course designed to give you real world experience in creating wallets, sending and receiving crypto, and practicing the vital skills you need in the field to avoid costly mistakes. Our team of world leading practitioners have played key roles in some of the world's most impactful cases, shutting down illicit mixers, dismantling darknet markets, prosecuting hackers, and recovering over eight billion US dollars at the time of seizure. Our new core states are now open with limited seats available in the upcoming session. Visit the Asset Reality Academy today to learn more and reserve your seat in one of our upcoming training sessions. Now on to today's episode.  

Aidan Larkin

Welcome to Seize & Desist podcast. This special I am absolutely delighted to introduce to the show, Mr. Nick Furneaux. Nick, how are you?  

Nick Furneaux

I'm well. Yeah. I've just had a holiday, which I haven't had a holiday, just me and my wife, for about a year and a half. So, yeah, absolutely lovely. Feel quite rested and enjoyed seeing some sunshine.  

Aidan Larkin

You poor thing, and your first action back is to come and talk to me about all things asset recovery. You have been busy this last year, eighteen months. Do you wanna give us a bit of an update on what you're doing this week and what's being released?

Nick Furneaux

Yeah. So exciting week this week. My second book is officially released, although I think one or two have already started to receive them from Amazon called There's No Such Thing as Crypto Crime. It's taken best part of two years, I guess, to write, and you're writing whilst trying to work. You're writing through family challenges. You're writing through building a house, which I now live in, writing through my father becoming very sick and dying. You know? So you always think about writing a a book, and you sort of have this thing in your mind that you'll be able to  

Aidan Larkin

There'll be a quiet window of two years.  

Nick Furneaux

Oh, loads of time where I can just sit there and, you know, sip on a cold drink and enjoy sharing your pseudo wisdom. And, it just it just does not go like that. But there have been parts of it that have been very enjoyable, and it's lovely to see what is a much bigger book this time than my previous work.  

Aidan Larkin

And I think to take things back a little step, it would be worthwhile whilst you're LinkedIn famous, as some people refer to. There will be folks out there, shock horror, that do not know Nick Furneaux. And to give my unique perspective on this, when I first met Nick and I've seen this wonderfully exotic surname, I was expecting this sort of like French mathematician to first be introduced to me when I heard the name, no, do you know Nick Furneaux? I was like, no, who's this guy? And I think you're more Bristol, less Bordeaux would be the  

Nick Furneaux

Yeah. You can hear it. You can hear it in the accent. You're at Lush. I'm very West Country. Yeah. I've just literally, I've just got back from Geneva as well. And so they speak French there. And, of course, the hotels see your surname and they just battle straight. And I speak enough French to be able to understand that I had no idea what this  

Aidan Larkin

And and especially when you go somewhere where you've got the combination of know what they offer you, do you wanna speak in German or do you wanna speak in French? And you're like, do you do Bristolian? For those that don't know, obviously, Nick and I co-founded Asset Reality, but our origin story goes back way before that where we were involved very early in one of the first crypto seizures in the UK. But, Nick, for those that don't know, you are famous but elusive at the same time, which is, I think, sort of tips the hat to your previous career. I think a lot of people don't necessarily know your origin story, particularly if they haven't read the book or they haven't seen you speak before. So would you like to give us your version of events as to so what got you into this world in sort of writing these books?  

Nick Furneaux

I was fundamentally a computer forensics guy, data acquisition, and wrote tools for some acquisition of data in in covert environments and things like that. And and then moved into analysis of computer memory and sort of very advanced open source intelligence gathering methods, and and then we sort of started to teach that stuff. And although I very much enjoy teaching, I don't particularly enjoy being in the limelight, I have to say. I think that's noticed. I sort of try and exist on LinkedIn, but I'm not somebody that is doing the conference circuit all the time. And I much prefer to be at a keyboard doing something fun, doing something cool, coming up with a new idea. But then back in 20- about 2015, I was contacted by a local police force that had a computer with Bitcoin on it, and they wanted to know how to get the Bitcoin off, you know, how to carve it, which is a forensic digital forensics. And I just realized, hey. They they don't understand how this Bitcoin thing works because they're asking the wrong questions. Yeah. And that made me think I should spend a bit of time on this. And then 2017, 2018, I wrote Investigating Cryptocurrencies, and then we built a course around that. And over the next five years, myself and a guy working with called Luke Russell, we trained thousands of investigators, primarily government and law enforcement over that time and, also investigated over twenty billion dollars worth of crypto oriented crime. So, you know, certainly at the up to about two years ago, I think we we'd investigated more than anyone else on the planet I think.

Aidan Larkin

I think so.  

Nick Furneaux

There are others catching up now, you know. But that's fundamentally my history. So I don't mind sort of being out there a little bit, but I I sort of prefer to be in the shadows with my face in a keyboard. Well, not my face in a keyboard. You know? Face planted.  

Aidan Larkin

But tell me this then and the bit that I don't know and none of these are like canned questions that I secretly know the answer to. I genuinely don't know the answer to this one and again I think it is a testament to your wanting to be a practitioner first. And obviously, the nature of us working together at Asset Reality, literally a company founded during lockdown. I think we've seen each other once in person in the last four years, was it?  

Nick Furneaux

I try really, really hard not to travel. And that's not through actually a lack of desire to travel. That is due to and, no, not not unique family and circumstances, but family circumstances which lead me to be here because of a disabled daughter. And I'm just very, very fortunate to to be at a point in my career where I can say no to things.  

Aidan Larkin

It's online or nothing.  

Nick Furneaux

But also, I've realized over the last couple of years that that sort of reduction of travel has also given me an awful lot of opportunity to have a clearer head. Mhmm. I find the more that... let me give you a little bit of context. I left school at sixteen. I have no qualifications in anything.  

Aidan Larkin

Snap.

Nick Furneaux

Never went to A levels. Never went to university. I don't  

Aidan Larkin

Ditto.  

Nick Furneaux

This is an American audience. I never got a diploma. Yeah. I like to see a problem and then work to solve it. And, actually, I find the more things I listen to and the more things I read from others, it defines your thinking. And I actually prefer to start from scratch and work myself. First principles. Yeah. And that's a personality flaw in many ways. It sort of works for me and against me. But the last few years, just sort of not being on the conference circuit and not being involved in that all the time has sort of provided me with a clarity as to think about, in writing this next book, what is actually important? So if a legislator or a compliance person or a law enforcement investigator or a financial investigator wants to understand this crypto thing and how it relates to criminality, what actually is important? And although and the book's, like, five hundred and something pages long, but I've still left out more than I put in. There is still a load more to write. And in fact, right at the end of the book, I think in the last chapter, I actually say, I'm hoping there's people out there that think, well, you could have written more on smart contracts or you you could have done more on DeFi. And I'm saying, please go and write it. I'm more than happy to introduce you to publishers and that sort of thing. But we literally we have my book in 2018.And now this one.

Aidan Larkin

Yeah.  

Nick Furneaux

In a multi billion billion dollar industry of investigation.  

Aidan Larkin

But I think that's the bit that you do deserve the credit because people haven't tried to solve this, and the only source of information that's out there is either popular vote or things people get paid by or things that are tool specific. And I think that's why so many people gravitated towards your book at the time because it was and still is the only text that just it doesn't have an axe to grind. It's not crypto is good or crypto is bad it just is. It's a thing. But I'm interested in the point you made about 2015, they came to you with this case of Bitcoin. What was your initial exposure? Was that the first touch point? I appreciate you may have heard about it or read about it in the press but had you actually been involved at that stage in your in your sort of former life? Were you actually encountering it? Were you sent it through the white paper? Like, what was the  

Nick Furneaux

I've read the Bitcoin white paper, and, actually, I often say this when I'm being interviewed, but the Bitcoin code is some of the most beautiful extraordinarily clever. It's never been hacked. Read my book if you don't believe me because, you know, Erica Stanford, who's gonna be there on Wednesday, has written all about how Bitcoin has been hacked. It hasn't actually. No one has actually managed to hack the Bitcoin blockchain. It's all through third party services, through exchanges, VASPS.

Aidan Larkin

It's the big b and the small b conversation. The amount of people that just don't realize. It's like, you know what? Again, this is why these repeated messaging is required. You think that 2024 people will get it now and I think your point about writing the next book, we see it out in the field. If it's not your lane, it's not your lane. I know nothing about digital forensics. I mean, people just assume that everybody knows, and these sweeping statements are made. And I think that people don't realize that if it wasn't for ChachiPT and other things, the amount of people that sit in the background going, I have no idea what they're talking about. And the Bitcoin being hacked is a great example of those going which which are the three or four things you're talking about?  

Nick Furneaux

People always assume I own loads of crypto. But literally  

Aidan Larkin

This podcast is not financial advice.  

Nick Furneaux

No. No. I read the the white paper. And I thought conspiracy theorists and criminals. Alright? That's that's what that's what I thought.  

Aidan Larkin

It'll never catch you on.  

Nick Furneaux

And yeah. And, you know, we were just talking about an old friend of mine, Chris. I had an idea. I mentioned him in the book, actually, because when crypto was about I can't remember. I make it out. But it was about two and a half thousand dollars. He called me and said, like, how much of this stuff should I be buying? And I'm like, don't bother, mate. It's all conspiracy. It's not criminals. So I think I've got, you know, I've got about ten grands worth of crypto across a number of things. I never predicted that something like Bitcoin would capture the public consciousness and go on to be sort of worth something and being talked about on the world stage and, you know, have US presidents talking about it and things like that.  

Aidan Larkin

Yeah. Who saw that company that in now 2024 you basically have two candidates sort of saying, I love crypto more. Yeah. I think it's just what is it? Eighty it would hit eighty two overnight? Eighty one eighty one eight? Yeah. Yeah.  

Nick Furneaux

I think last night. Something like that. So  

Aidan Larkin

Well, just as a depressing time stamp. When you and I met, I was the world's first seized Bitcoin auctioneer at three thousand pounds per Bitcoin. And the same thing, people are gonna excuse me. Should we buy it? Should we buy this stuff? You're like, magic beans. Yeah.  

Nick Furneaux

Conspiracy theorists and criminals. And that's the reality. But as I say actually in the book, don't take investment advice from your investigator. And it's back to that whole thing that time and time and time again, you put a report in and you say that this person lost three Bitcoin. And the question is always the same by a senior officer. They always say, how much is that worth? Well, it's worth three Bitcoin. Yeah. Yeah. Yeah. I know. But how much is it worth? I'm sorry. Is there an echo? Three Bitcoin. And, you know, we seem to think that Bitcoin equates to a dollar value, and that was not the original purpose. The original purpose was to separate from the bank, separate from fiscal policy style fiat currencies, and to be its own self generating currency. It's only become an investment mechanism and investment asset because it's been picked up by those sorts of people. And so you have Wall Street now rubbing shoulders with conspiracy theorists and criminals on that blockchain.  

Aidan Larkin

And we've seen that go horribly wrong. I think it was the the Swedish Bitcoin case where they had a you can Google this. It's all in the public domain. I'll get some of the facts wrong. But it was something like criminal convicted had, I think at the time, one point three million euros worth of Bitcoin, twenty or thirty Bitcoin or something way back. But they made the mistake in the court order of freezing the euro equivalent amount. So let's say they seized three hundred thousand worth of bitcoin. Two years later convicted, final court confiscation slash forfeiture order granted and they said wonderful we'll take this pile of assets and the judge was like no you came for three hundred you can have your three hundred and they had to give a million euro back to have convicted criminal. Now I hope they hit away the big tax bill and done something else and got the money off them but again it goes back to this the importance and I was actually I was speaking at an event in Australia a couple of weeks ago and I got to meet a bunch of Pacific Islanders who we were talking about the growth of crypto in their jurisdictions because people are setting up companies, we've seen some crazy legislation in the Cook Islands, we've seen stuff being done and someone mentioned to me do you know a place called Palau? I was like I happen to know Palau very well. So we're reading next book. It would be useful just very quickly to give people that segue because people do think that, you know, Bitcoin is this new thing and this concept of decentralized and sort of not having a middle person. This is a new thing that was just created. Do you wanna give people the multi century sort of history lesson?  

Nick Furneaux

Well, actually, I it kicked off my first book in 2018 with this and this little island called Yap in the West Pacific, and they have huge stone coins as money. And how does everybody know who owns each stone coin? Well, it's quite simple. All the villagers know. So they will know, I think, almost to quote the book that the stone on the pathway on the way down to the harbor, that's owned by John, and it used to be owned by his dad, and it used to be owned by Farmer Joe decades before that. And so what you end up with is a distributed ledger where the ownership of every stone coin exists in the mind of the villagers. So if I come along and go, that's my stone there, as long as fifty one percent of the villagers disagree, then you're gold.  

Aidan Larkin

We're perfectly plausible. Like, I know who owns the local village pub. Like, there's no issue with it. If someone else comes along and says, that's my pub. Well, it's not your pub. Everybody knows Steve owns the pub and Steve's owned the pub forever. And I think that a lot of people don't get that this is just a new representation of a process that has existed. And I like your summary point. Again, full disclosure, I sat your course many years ago and I really enjoyed the concept of that almost sarcastically with your comedy timing of, like, what would know this big ledger in the middle is just a bank? It's like people hear these terms and think they're new, like centralized, decentralized. It's going well, you've all got paid through centralized ledges and you've used centralized ledges your entire life with banking, just taking that that thing out. That sort of brings us on to that. You talked about having a bit of crypto yourself. I always remember your advice, and I'm wondering, do you still stand by this? That for new people entering the industry in terms of investigators and the asset recovery folk that would be listening to this sort of podcast, Do you still advocate? Like, just go and get some get some crypto, get a hardware wallet, open an exchange account, walk through that. Has your advice changed over the years?  

Nick Furneaux

It actually has focused down a little bit because if I was saying that to people a decade ago, the number of wallets available were limited, and they required a little bit of knowledge. They required you to get your head around how the private key works. Now we have a situation where you can just download them on your phone or just about anywhere, and then you generate your seed words, which if anyone doesn't know, is your private key, and the clue is in the name, private. And the problem is this is a really good example. Actually, I'm mentioning this at a speaking at SOX, the Serious Organized Crime Yeah. Exchange next week. And I should give an example of a guy in Florida, gave me a call. He lost quarter of a million dollars. He was a very intelligent man, a very sophisticated investor, but he was struggling to move funds from a personal wallet into Binance. So he couldn't get a hold of Binance because nobody can get a hold of Binance, of course. He went onto, I think it was Reddit at the time or something like that, onto a Binance support group. And somebody jumped up and said, yeah. I'm a support person for Binance. Let me help you. Let's go out into a DM. And then they said the clever thing. We need to authenticate you, so could you please give me your first, third, and eighth word of your seed phrase? So, of course  

Aidan Larkin

That is legit. Yeah.  

Nick Furneaux

And you say, oh, your password. Can you give me the first and third letter? You know? So you're used to that type of authentication. So they didn't think anything of it. And they said, oh, that didn't work. Can we try your second  

Aidan Larkin

Second, fourth, and sixth? Yeah. Yeah. Yeah. I shouldn't laugh, but yeah. That's And and that's it. Oh, it's tragic. It's tragic. Got.  

Nick Furneaux

So what was wrong there? All that was wrong was a lack of knowledge of how it worked. And I would say if you're gonna get into crypto, whether that be investing, whether that be investigations, you do need to fundamentally understand how this stuff works. Otherwise, you're gonna get yourself into trouble.  

Aidan Larkin

It is. And I think that we've always advocated, you know, having a little bit of knowledge. But sometimes a little bit of knowledge is a dangerous thing, as you say, because then you get people making assumptions. And, like, flipping that piece on the assumptions, what are you seeing on the ground now in terms of the victim's perspective and asset recovery cases? We talk a lot about getting money back, taking money off criminals, getting money back to governments. But I think crypto in particular, because of the nature of personal ownership, we're seeing fraud and theft relating to crypto in ways that's just not imaginable. No one's kicking in the door to take your gold bar because the ownership just isn't there. But with crypto, what have you seen as that evolution over the last sort of number of years? I mean, is it getting better? Is it getting worse?  

Nick Furneaux

It's getting worse. And one of the ways it's getting worse is that targets used to be people that owned crypto. That's a reasonably small group. Now more people own it. And secondly, it's easier for a scammer to get a victim to transfer money into crypto. That's become much, much easier.  

Aidan Larkin

The onramping side of things.  

Nick Furneaux

That’s it. Get the payment in crypto. So a romance scam, pig butchering scam, and it's a guy who says he's fighting in Ukraine, and he's got terrible body armor. And but I can't accept money because that will get picked up. And so if you can send it through crypto, and they'll talk you through how to do it. Because that has got so much easier. It's got easier for the scammers to deal with it. And then people don't understand what they're doing. They don't understand the crypto they're moving, the funds in it, realize they can't get them back. They got and so on and so on. And so, yeah, it's absolutely getting worse because it's easier for scammers to target a broader audience and still get the payoff in crypto, which then makes it hard for us. And the second problem is the cost of recovery. Yeah. So I had a call an hour ago by a friend of mine called Joe who said they've had someone contact them, and they've lost crypto, and they wanna do an investigation. They wanna find out how to get it back. You know, where has it gone? Can we get it frozen? Eighteen thousand pounds. Now eighteen thousand pounds, you and me, that's a lot of money in our car, isn't it? But you and I know that the reality is if I charge to do an investigation and if we then get a law firm in to do a freezing order against Binance, what are we down for? Fifty grand?  

Aidan Larkin

I said this and, you very kindly give me a section in your book, and I think we estimated it was seventy five thousand. Yeah. Seventy five thousand being the average cost of the thousand odd investigations we had seen. By the time you get off and running, of course, you can get a first report. Of course, you can get those first couple of letters off to an exchange. But by the time you actually get some meaningful information back, we would say the cost of recovery to actually get to a touching point of getting some assets back you've got to be prepared to spend sort of seventy five to one hundred thousand dollars which is just an insane amount. But then if you compare that to a regular asset category if someone snatches a twenty thousand pounds Rolex off your wrist in Piccadilly Circus how much would it cost you to go and get some ex special forces operatives to say hey try and track this guy down because the police don't have the resources to take on this case. It's almost painfully similar to regular assets. What is your thoughts then on the likes of, obviously, Erin West that have a prominent part in in opening your new book? What what are your thoughts on, Operation Shamrock?  

Nick Furneaux

Well, you've got people like Erin that are sort of trying to take the fight back. We always use the whole David and Goliath thing, but we definitely have a Goliath of scammers around the world. I mean, we've got Nigerian scammers using mine and Erin's names in order to scam other people. And so we're never gonna win. I think this is the problem. But that doesn't mean that the fight shouldn't happen. That doesn't mean that some victims should not get their funds back. And I think it'd be very easy to say this is an impossible battle, so why go after it? Why not just go after the big fish? And I think what we need is people like Erin helping the victim, and I think we need central government to be, as they should be doing, actively going after the organized crime groups because that's where it all goes to in the end. If you can disrupt the big organized crime groups, if you can disrupt the big scam farms, there's there's just been a big series of arrests in Southeast Asia. They shut down a big scam farm. Because you gotta remember now, you know, a lot of the people working in these scams are themselves being victimized. We're getting reports of people being tortured, raped. You know, they're not allowed to leave the the scam farm if they don't do well as threats to their family. I mean, really terrible.  

Aidan Larkin

These are people that are entered into countries on the promise of a job. They surrender their passport. They get forced in. And, yeah, I've been covering John W at UNODC. I actually spoke at an event in Bangkok last year and they were showing the scale of capital investment in this sort of golden triangle. Like, these are not, like, three people in a shed. These are old casino buildings that are six stories high that are now just filled with people and things now are just getting easier because they can use tools like AI tools to run different types of scripts and run multiple types of identities and basically just fish at incredible levels. But I I think I agree with you, It's kind of pointless. It's it's almost like tackling smuggling of migrants and human trafficking. There's no point just picking off one person here and there. These are fundamentally large organized crime gangs that are huge sort of terrorist organizations.

Nick Furneaux

Actually, Aidan, a really good example. Just because we're not gonna stop the trafficking doesn't mean we shouldn't send coastguards out to try and pick people out of the water and save their lives.  

Aidan Larkin

It's like tackling the crime. You kinda have to stop. You still have to do it.

Nick Furneaux

Do that. And people like Erin are championing the victim. And in fact, I don't know if you had a chance to read any of the book yet, but in my bit of the foreword. I actually say, please, if you're an investigator, stop thinking about targets and stop thinking about attack and start thinking about the victim.

Aidan Larkin

I didn't read that.  

Nick Furneaux

Because that's then also, as investigators, what gives us our quality of life that we feel that we're doing some good and and giving back a little bit. But so much more needs to be done in order to take out the organized crimes. And I I was gonna put it's I'm doing the after dinner speech at SOCEX next week.  

Aidan Larkin

Do you know what it is? Our colleague, TJ, TJ Abernathy, he did the last one.

Nick Furneaux

There's, like, four hundred people that have been drinking. And the only person in the room that won't have been drinking is probably me at that point. And, so I'm just trying to decide just how sort of hard can I go, you know, to say that we we that just how much we need to be focusing on this stuff? But, you know, we need the top that top and bottom approach like human traffic.  

Aidan Larkin

Well, it's interesting because, I mean, you you alluded to it. It's the title of of your second book. I mean, I think it's this mindset of disassociating the asset category as being indicative of the crime type and sort of unpacking. What I mean by that is when people are looking at these cases involving crypto, you know, what is it? Is crypto the vehicle for the money laundering? Is it the thing that they're taking their hard earned cash and flipping it into crypto at the request of a scammer? Is it a theft involving digital assets? Is it some other elaborate scheme? I suppose if I was standing alongside you at that the SOCEX event, I mean it's a case of we always hear the same thing from investigators and law enforcement, it's doing more with less. Fraud being one of the biggest crime types and categories, biggest in the UK certainly that affects citizens, but a low amount of people. And the UK has done a great job with new legislation coming out but none of that will matter unless politicians actually give them the amount of officers and budgets they need to have the tools and the training they require. What do you think about this sort of growing threat? I was gonna ask you about this, but you actually mentioned it. Was people using crypto as they on and off from? Where do you think Bitcoin ATMs? I had a one of my most commented on posts I put on just frivolously because I was flying back from Australia. Everywhere I went, Sydney, Melbourne, Bitcoin ATMs, Bitcoin ATMs everywhere. And, like, in the back of, like, a convenience store with no CCTV. Like, they were not in a international financial center, let's be absolutely clear. And all I see when I hear about them is some victim going along having been tricked into sending someone money, and they have to go and use this Bitcoin ATM because there's no other way to do it. And you've got these, like, people that are victims of elder fraud going from ATM to ATM to ATM and feeding them. What's your views as an author and not the views of any company you work for? What's your views of the interactions you've had with Bitcoin ATMs and have you seen good practices? I can think of a couple of Bitcoin ATM companies that are tried. I still struggle with the use case bar novelty, if I'm being really honest.  

Nick Furneaux

Well, mate, it's back to well, I think it's really simple. The FCA did a great job in basically saying, if you run crypto ATMs, you need to be registered. I don't think we have any at this point. And so we have no Bitcoin ATMs in the UK that are working legally. So let's have a look at it. First of all, this is no different to the machine in Dubai where you can feed dollars in and get gold out. Yeah. It's just translating one thing, one asset to another asset. The key is what they charge. So if I set up an account with Coinbase and send them my passport and all that sort of stuff, they're going to charge me a very, very low percentage point on my transaction. If I rock up at a Bitcoin ATM, they're gonna be charging me anything up to seventeen percent, twenty percent on the transaction. So why is anyone gonna do that? Lack of traceability. That's all. It's why money laundering often used to use casinos, so they would smash a load of money in the casinos, lose a bit of money, and then bring the money out again having laundered through the casino. It's worth the loss. And so being able to push through an ATM with no KYC, you know, no know your customer stuff, no personally identifiable information, pushing that through is worth the loss, but not to literally anyone else at all. They're a criminal enterprise even if the people running them are not.  

Aidan Larkin

There are some people who are sort of combating, me and Paul Mylvaganam and my colleagues. Paul, you know, Paul is a is a great authority in some of this stuff and has produced some some wonderful sort of articles and research around it. And I think there are legitimate companies, of course there are, and there are legitimate companies with with proper KYC processes. But again, it goes back and you you still argue that, but the why. And again, it goes back to your point of, again, the sixteen year old that left school with no formal sort of qualifications. Not sure if it's Toyota. Is it the five why's or the seven why's? Just keep asking why, and you'll usually get to the and again, I still struggle with the why. I don't get to. And as you said the novelty side of the bitcoin or the gold the gold vending machine, but even at that you're still stuck with a bit of gold. It's not an express lane to another on ramp and I think that that's why Bitcoin ATMs do deserve that additional layer of scrutiny because what you're finding and what we know is the reality is it's kind of like saying we're all under CCTV but if there isn't people watching the CCTV it's not really effective as a deterrent. And I think that I know as a scammer if I get you to an ATM and I get you to put ten thousand dollars worth I know there is no law enforcement in the world that will have the resources to go drop everything I'll go after that ten grand and all I have is KYC is a text message and an email and a cell phone verified somewhere in a different continent. So I agree with you. I think that they do deserve the scrutiny until there's wider, more applicable use cases at commercially sensible fees. Whereas right now, as you said, the the fees and the and the fee variation is is enormous.  

Nick Furneaux

Remember, Aidan, look, we don't yet have a crypto currency. If you wanna go, you know, the old Bitcoin pizza thing. If you want to go and buy pizza Bitcoin, the the transaction cost is just way too high. That's why we've got this thing called the Lightning Network, which works but hasn't really ever taken off so that you can do very, very low cost multiple transactions. So there are people trying, but the only reason to own Bitcoin is either as an investment asset, legitimate, or for criminal reason. There really isn't much else in between. There's no point owning Bitcoin because you wanna go and buy a car or something.  

Aidan Larkin

Yeah. And you would, and I think that's a nice segue into the the potential future use cases around. And I think also just quickly as a segue point, most people often forget that certainly when when I get to talk about it, it's reminding people, like, there's bitcoin which is the standalone one. All of the rest have people behind it. I mean there's human beings and there's companies registered overseas and that's a good thing for an investigator as there's touch points but it also means then back to the question and the why, question the methodology, is this a rug pull, is this, you know, a scam, is it magic beans, is it the next one coin, or is it the future of blockchain enabled transactions? What what are your thoughts? I know that TRM, for example, and others have had new sort of task forces created with companies like Tether and I sort of see that there is sort of green shoots of hope in that if criminals are using those types of assets and the transaction volumes are so high well then that's where you're seeing really novel use cases of the technology to be able to burn and reissue or remint. Do you think that it's a case of criminals will stop using digital assets when we just start looking at them more? Because right now it's kind of like a it's a greenfield space. I know as a criminal that I keep the head down and I keep under a certain volume that likes of me being detected. It's like bringing a couple hundred dollars in cash through the airport is not going to attract the same amount of attention as bringing a million dollars.

Nick Furneaux

Actually, that was what I was gonna say, mate. You know, we watch cash really carefully internationally, but criminals haven't stopped using cash because of it. They just find other ways. I was listening to somebody just recently talking about control of cryptocurrencies, and he used this great little analogy of paper boats. And, I think it's Japan or something where they make these lovely little origami paper boats. They put little candles in them, and they send them off across the lake. And it's a little bit like that. You've got these people making these paper boats, and they let go, and something happens criminally, and we say, we need help with this. They go, nothing I can do. Just a paper boat floating away. I can't touch it. You know? And this is the problem with many cryptocurrencies. You know? If I phoned up Vitalik and say I've got a problem with Ethereum, could you help me find it? He's just gonna go, paper boat. You know, I have no control over those.

Aidan Larkin

Where's the inventor of email and the inventor of SMS? I've just been defrauded.  

Nick Furneaux

Yeah and there’s no way around that. And I feel a really good friend of mine is one of the original developers of Monero, and I feel very sorry that for him and for the others that they just got utterly vilified, really, because they what they did was they created a properly properly private cryptocurrency. But the result of that was conspiracy theorists and criminals going, oh, well, that's pretty clever. And, you know, there was there was some vast sums of money going through Monero. But then the creators of that, who created it for good reasons with good tech, got vilified. It's like, Phil Zimmerman, who created some of the early encryption algorithms and then got branded as a

Aidan Larkin

Now it's all his fault? Yeah.  

Nick Furneaux

Actually, literally, persona non grata, you know, sort of enemy of the state because he was giving it to people. They were like, right. We're classing this as a weapon, and so that means you are exporting weapons. And absolutely terrible time, but he didn't create it for that. He didn't make it so that terrorists could talk to each other. He was trying to do a good thing, and this is the problem. And the problem is whenever you do something good for privacy or whatever it might be for people, it tends to get criminalized.  

Aidan Larkin

And again, it's not a crypto issue. I can argue that the manufacturers of the first weapons, Mr. Oppenheimer, like there are this is the history is littered with this. Telegram chats. Now, yes, you can bring decentralized and free messaging to millions and billions of people all around the world, but again, I go back to my Spider Man quote with great power comes great responsibility and I think that it's almost like the cost of doing business I think those companies that if they cooperate with law enforcement if they you know give up access to the technology but again how do you get the balance right and it's almost refreshing and it's like we haven't figured that out as a global community, we're sure as hell not gonna figure it out just with a crypto lens on it if we can't figure it out. Where do you think this all goes? Because again go back to your earlier comment, you're not a crypto guy when you're a digital forensics person who likes putting their face in a keyboard and figuring things out. I mean, what are the next things that you're figuring out? And we talked about the scams enabled by AI and not AI in the Skynet version, just people using productivity hacks so that they can do things at scale and replicate processes of thousands of people but controlled by one person. And what do you think are some of the challenges and opportunities presented by AI as we look into this fight against fraud and asset recovery?  

Nick Furneaux

Oh, I've been saying this for years, actually, because anyone who doesn't know, TRM Labs' outstanding track and trace software came and bought all my training a couple of years ago because they really believed in tool independent training. They still do, and that's very, very important. One thing that TRM Labs software does very, very well is some AI view of the transactions to help you understand or to interpret what it is you're looking at, what are the patterns. I felt for a number of years that we can go a lot further with that, and I feel the next step is prediction. Do you remember minority report?  

Aidan Larkin

Yeah. Yeah. Indeed.  

Nick Furneaux

I think you know the film with Tom Cruise.  

Aidan Larkin

Tom Cruise.  

Nick Furneaux

And I think I said in my books, I'm rather sort of traumatized people lying in a hot tub.

Aidan Larkin

The empaths.  

Nick Furneaux

Yeah. That's right. So we can sort of predict crime. Well, if we look at the ability to predict, maybe sort of analyzing real time data, if we can't do it on a blockchain, I don't know what we can do. We've got this open data where we can say, look. This over here, this was a scam. This over here, this was money laundering. This over here. Because the reality is, if you just give me an address, I can pretty much look at it and go, scam. Sorry. You're losing your money here. Because I recognize the pattern, and I think what is gonna be great is is real time prediction. And then, of course, law enforcement are gonna have to catch up with the ability to say, oh, we've got some intelligence here that this looks like it's a real time scam. How do we deal with that? Because I think the technology is there to be able to do these types of predictions, but is the infrastructure there for law enforcement to be able to do anything about it?  

Aidan Larkin

I think that this is why we exist to sort of improve asset recovery, but fundamentally to give money back at the law enforcement to fund these things because the worry will always be even if we build the tools, there'll be a five year procurement debate to try and get these tools into the hands of people that need it. And again, like reiterating, these are not crypto challenges. I mean, we can see you can look at a particular if someone sends you that email, you know, to invest and those are to make money, you can look at that email and you can see this is all the hallmarks of a scam. You know you're being scammed when you get that beautiful attractive person with a WhatsApp sends you your wrong phone number type thing, and you can see these scams. And I do think it is a bit of a an indictment on society if we have a blockchain that you can't actually look and follow it all through. And what I know I think it was Solidus Labs. I was on stage with them a couple weeks ago with Isabella actually in TRM at the RegTech Forum. And I think it was Solidus we're talking about they have I don't know whether it's a smart contract tool, but it was about looking ahead of time at the actual now there's an element of predictions being made, but there's also just a screening. And I I thought maybe to explain it for those that don't know and for me for the avoidance of doubt, why haven't we got to a position where as a potential victim, when I try and type in the address I'm sending to, is it a case of the wallet companies couldn't just have that integration that just basically says don't do that? I mean, surely there's enough blockchain data out there now, or is that already existing but it's just not widespread enough that do you know, like, in your bank, the take five for fraud, I could type in the details and I can say I'm gonna send this money to Nick and it's like, this is not Nick. This is someone that's living in a different continent to you. I mean, is that coming down the line for Blockchain technology? Because I would imagine with all that attribution, why do we not have that model screen?  

Nick Furneaux

It’s that crypto just doesn't work like that. And the problem is we still use the I I use the the phrase send and receive.  

Aidan Larkin

We don't actually send and recieve.

Nick Furneaux

You literally don't. You unlock a transaction on the blockchain, and then you lock it with somebody else's private key. It hasn't gone anywhere. It's just generated a new a new entry in the ledger. So where we have, you know, sort of banking where it says, oh, let me let me check the owner of that, and that seems to fit and it's the right sort of code, and that just doesn't exist because we don't have built in to cryptocurrencies attribution.  

Aidan Larkin

That's kind of the point.  

Nick Furneaux

Not to be like that on purpose. So I think we have to decide, are we gonna move away from the whole Bitcoin thing and move into a sort of a crypto world where all addresses are are attributable and you have to look at  

Aidan Larkin

So that that yeah. So  that but that's CBDC territory. Government issued CBDCs?  

Nick Furneaux

Yeah. That's the choice. But you see but the reality is is that there is a massive groundswell of people that they don't want a currency like that. Otherwise, they would just use their bank. It's gonna be it's irrelevant to them. So I'm not sure how we're gonna solve those things. While we still have pseudo anonymous blockchains, pseudo anonymous addresses, we're gonna be facing the same challenges, which is why we need people like your TRM Labs, your your Chainalysis, your Elliptics, who are busy building those attribution databases every single day to give investigators, attribution databases every single day to give investigators a fighting chance. Because at the moment, there's just no other way of doing it.  

Aidan Larkin

And I think that we've we've talked about this a lot, but, I mean, from a victim's perspective and those issues, it's no looking for the old historical if it looks too good to be true. I mean we still get on a daily basis someone saying I did this thing and looking back on it, I could have saw the signs or the signals. Do you think that what is your outlook for the potential third book? Like, what's the magic wand? What do you think that we're gonna be chatting about in three, four, five years' time? Or, again, if you had this magic wand, what's the one thing that you think it could change this problem we have with international recovery asset recovery fueled by this particular asset category of crypto assets?  

Nick Furneaux

Yeah. I I I've gotta be honest, I'm not sure. I mean, when I released the the the first book in 2018, I said I would never do another one. I mean, I think it's I don't know this personally, but I think it's also a bit like childbirth where my mother would go, never again. And then within a few weeks, they're like, three kids and another one. And, I know this because I have a wife with children, but, I'm not trying to culturally misappropriate with gender misappropriation.  

Aidan Larkin

Just keep digging. Just keep digging.  

Nick Furneaux

Yeah. Yeah. Yeah. I I think I need to keep going with that one. That that thing the the pain of of writing a book actually is quite significant. It it's a lot of it's sort of what's went to. And at the moment, we are gonna need more, and I'm hoping other people pick up that baton. I am saying right now I probably wouldn't do another one, but you're absolutely right. In another three or four years' time, you know, when we really see the problems that exist and if we're just not seeing people picking up that baton of of generating that type of freely available training, if I can use that term, that someone's gonna have to do something. But, you know, I am talking to other people who are tremendous investigators who are saying, do you know, I would like to write about this. And so at the moment, I'm already speaking with them about about supporting them and helping them understand the process for that, getting them into a a publisher, you know, maybe helping with writing the forward or something like that. Because we need more than just my language, really. We we need a lot of people writing about this.  

Aidan Larkin

Well, I think that we've also had the same contact from from Wiley around asset seizures because again it sits within that wider context and this is we talk about the great one percent only recovered. But no. Crypto has many of the people that you've worked with and trained. We saw those billion dollar seizures becoming a regular thing. So it's quite clear that the ROI is there for governments that by getting involved in cases involving digital assets it's not like taking on a five year money laundering investigation or an unexplained wealth hoarder where there could be decades of eye watering legal fees. There seems to be this opportunity there. But, again, unless it lands in your lap, and so maybe you start getting involved in the tools and the training and going after these and not being afraid of these cases. As you said perfectly, there's no such thing as crypto crime. It's just another asset category, albeit with  

Nick Furneaux

Its all the same crimes. Nothing new under the sun. You know? It's there's just nothing new. But there absolutely needs to be a seizure book, which needs to be you know, when we did the seizure chapter and I had great input from Chris Recker and and some of his colleagues, input from yourself, and obviously, I wrote a bit of a technical thing as well. I got to the end of that chapter, and I'm just like, man, I could just keep writing. You know, I hadn't touched on legislation and the legal stuff, and I hadn't touched on where you've got assets that are in DeFi, decentralized finance contracts, and having to unstake those before you can seize them and, you know, all this sort of stuff. And you get a thousand page book, and no one's gonna ever read it. But they may not read this one. So, definitely, a seizure book, I think, should be should be on the cards, but with a with a broad scope of readership rather than just a technical how to.  

Aidan Larkin

Yeah. We're we're seeing day in day out, you know, new judgments coming out and some of the complexity. I think we're getting over the bring me Satoshi Nakamoto judgments type thing, but now we are moving into those technical weeds. There was a famous case in the UK recently where they tried to go after the exchange, said the exchange should have known better, and the exchange was a party to things, and that was actually kicked out. So I think there's still a lot of bumps in the road to go in terms of judgments and bloody noses. And just at the time of recording this, we just saw the big result on the Bitcoin fog case, which again will be the subject of a lot of debate. And who knows what the president-elect Trump is going to do with people like Ross Ulbricht? He's been saying for a long time he's gonna pardon him. So we'll have to get you back in the new year, and we'll give our give our commentary on the crypto utopia that has been created with president-elect Trump.  

Nick Furneaux

Or who knows? Yeah. Russ Ulbricht on the line if if you could reach him on his super yacht somewhere in the Caribbean because instantly, if it was shown that he owned those assets that he has, he'd instantly be, you know, one of the richest people on the planet. So there we go. We we will see. We'll see what happens. It's that way outside my ballpark.  

Aidan Larkin

Well, who knows? If anyone needs investigated, I think you'll be the guy for it. No doubt that you'll probably get the call. Maybe you'll get invited up to, you know, Trump's task force, I think. No better man for it. Anyway, Nick, thank you so much as always, buddy. A big shout out for those who haven't already ordered or preordered their copy of There's No Such Thing as Crypto Crime. There'll be a link into the show notes. I'm going to see you at the time of recording this. We have our first asset reality conference this week: Seize. So we're gonna be in person. That's at the second time or the third time in history. It's like the royal family coming together.  

Nick Furneaux

I'm actually coming this day.  

Aidan Larkin

Yeah. There you are. In real life. Fully tangible.  

Nick Furneaux

People think I am just an AI. Yeah.  

Aidan Larkin

I think people when I say Nick and I work together, they're like, yeah. Right. Next segment of your imagination, it's kind of like Shutter Island. Anyway, thanks so much for your time as always, buddy. It's been an absolute pleasure.  

Nick Furneaux

Great to hang out.  

Joanna Summers

A big thank you to Nick for sharing his wisdom with us. If you've enjoyed today's conversation, like and subscribe to the cease and desist podcast on your preferred platform. Leave a comment and any suggestions for guests you'd like to hear from in future episodes. Next time, I'll be exploring the world of stablecoins with Erin Plante, our new head of special operations. Together, we'll break down what stablecoins actually are, their legitimate use cases, and why they've become a go to tool for international criminals. You won't wanna miss this episode, so mark your calendars. Seize & Desist is brought to you by Asset Reality. Thank you for listening.  

Lo Furneaux

Our podcasts are for informational purposes only. They are not intended to provide legal, tax, financial, and or investment advice. Listeners must consult their own advisers before making any decisions on the topics being discussed.  

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