"There's No Such Thing as Crypto Crime": Nick Furneaux on Blockchain Investigation, Digital Forensics, and the Future of Cryptocurrency

Secure Talk - Nick Furneaux

Justin Beals:  Welcome to SecureTalk, the podcast where we dive deep into the ever-evolving world of security. I'm your host, Justin Beals. 

Last month, the cryptocurrency world was rocked by what experts are calling the largest crypto heist in history. North Korea's infamous Lazarus Group managed to steal a staggering 1.5 billion in Ethereum from cryptocurrency exchange Bybit in a single devastating attack.

The hackers hijacked a routine wallet transfer, rerouting funds meant for Bybit's own wallet directly to their control. Within hours, they began laundering the stolen cryptocurrency through a complex web of transactions, working almost 24-7 to convert these digital assets into untraceable funds, all while the global crypto community watched in real-time. 

Investigating crimes over crypto can be incredibly challenging.

What makes these investigations so challenging is the multifaceted approach criminals take to obscure their tracks. They employ techniques like chain hopping, moving assets across different blockchains to break the trail, and utilize privacy coins that provide enhanced anonymity. They split funds into thousands of smaller transactions across multiple wallets and route them through exchanges that don't require identity verification. 

For law enforcement and financial investigators,this creates a seemingly impenetrable puzzle.

Traditional financial crimes typically lead paper trails through banking systems with strict know-your-customer protocols. But in the crypto world, investigators must navigate dozens of different blockchains, each with its own technical architecture, while piecing together fragments of information from public ledgers that contain pseudo-anonymous addresses rather than names. 

While the technology might be new, the crimes are the same old story. Fraud, money laundering, theft, and criminal enterprise. That's why Nick Furneaux’s book, There's No Such Thing as Crypto Crime, is so critical. It's the scout manual for how to investigate crime that may utilize blockchain technologies, reminding us that behind the technical complexity lies familiar criminal patterns that seasoned investigators already know how to tackle.

Now, Nick is a digital forensics expert, a cryptocurrency investigator, and a cybersecurity specialist. He has worked in digital forensics for many years and is known for his expertise in cryptocurrency investigations. 

He has served as a trainer and consultant for law enforcement agencies and private organizations on matter related to digital forensics and cryptocurrency tracing. He is the author of “There's No Such Thing as Crypto Crime” (2024), and “Investigating Cryptocurrencies” (2018). He has trained thousands of investigators in the essential skills needed to track cryptocurrencies involved in criminal activities. 

Currently, he works as a blockchain intelligence expert and master trainer at TRM Labs and serves as an advisor to the Board of Asset Reality. Really appreciate Nick for joining us today as a guest. This is certainly a very interesting topic, and I loved getting to chat with someone with this deep expertise in dealing with these Web3 technologies and investigating the crimes that happen.

Justin Beals  Hello everyone and welcome to SecureTalk. Really grateful to have our guest today, Nick Ferneau. Nick, thanks for joining us.

Nick Furneaux It is lovely to be here. Very good to meet you.

Justin Beals I'm a big fan and I know you through your book. This is our first time meeting but it really exceptional book, but I have to kick off about the title of the book a little bit. You've probably answered this question way too many times But I I love how it sets the stage The title of your book is There's No Such Thing as Crypto Crime, which kind of floored me being a crypto crime investigator

But I think this has a lot to do with your evolving perception of the field of investigations around crypto crime and technology broadly. Can you give us a little explanation on that?

Nick Furneaux  It's a click-bait title if I'm honest. My first book was called Investigating Cryptocurrencies that took us all of 10 milliseconds to come up with because the book was about investigating cryptocurrencies. And I sort of wanted something, I didn't want sort of investigating cryptocurrencies again or son of investigating cryptocurrencies.

I wanted a title that did sort of stand out a little bit and made people stop and think. And it very much comes from, I'm not suggesting, there is sort of no such thing as crypto crime and that there's no crime involving cryptocurrencies. Obviously, there is. It really comes from the fact that there is, I think it's a biblical quote actually, and I quote it in the book that there's nothing new under the sun.

And I was working with law enforcement and private investigation teams around the world. And they were all busy setting up cryptocurrency investigation teams. And I'm jumping up and down saying, be careful because there is no such thing as a crypto-only crime. There is no new criminal category. There is just a new payment mechanism.

And I often use the example of a man in London who was selling Bitcoin sort of on the street, if you like, sort of private sales. He made a couple of sales to the same customer, then invited them to his home. And when they got to his home, they tied him up, they pistol-whipped him and then forced him to transfer all of his crypto. What is that crime? Is that a crypto crime?

Do we just quickly go and grab somebody that has their crypto forensic software, their TRM lab software who I represent and give it to them? Well, obviously not because, you know, a car probably was used by the suspects. There might be, you know, number plate recognition cameras in London. And then there may be doorbell camera footage that's picked that up. And then there might be fingerprints where they press the doorbell or knocked on the door, and so there is so much more evidence because what we were looking at there was what they call aggravated burglary. I think they call it most sort of most countries and then by the way, what they stole was cryptocurrency. 

So sure, we need to sort of roll somebody into the room that knows how to follow those funds to see if we can, you know, freeze and seize, as we call it. But the reality was with almost every type of criminal category that involves cryptocurrency, there are other clues. There are other things. 

We know how to investigate terrorism financing. We know how to investigate money laundering. We know how to investigate romance fraud or pig butchering, as we now seem to horribly call it. And so nothing has changed in all of those investigations. The one little detail is now that we don't have dollars moving or prepaid credit cards or, you know, all the things that perhaps were used in the past, we now have this thing called a cryptocurrency, and people are convinced to go down the road and put, you know, $1,000 into an ATM, get the Bitcoin and then send that to the scammer. So that's providing a different element, but it isn't providing a completely new category of crime. Is that a slightly wordy but sort of fair answer?

Justin Beals  Really helpful because I think oftentimes when we see new technologies kind of emerge, we're resistant to the technology, especially if we're an expert in a particular field. And you do a lot of training for investigators around these technologies. It's got to give them a boost of confidence to say everything you've learned so far about crime and investigation is applicable as we start to look at the tech.

Nick Furneaux That's exactly right. it's interesting. When I brought my first book out in 2018, we made a mistake. And I have said this publicly quite a few times is that I came from a of a data extraction and digital forensics background. You we built sort of tools for covert extraction of data and analysis of computer memory. And that's where I'd sort of come from. And then suddenly, we found this crypto stuff. thought, well, the clue's in the name really. Crypto comes from cryptography. So it's going to be technical people investigating this stuff. And so I wrote the first book. I mean, there's Python scripts in there, for goodness sake. I wrote it for a technical audience. And then myself and my colleagues, started teaching courses for investigators, trying to understand how this Bitcoin thing worked.

And more and more, you get these technical people sat at the front going, fun times and scripting and that sort of thing. And then more and more, there were these people at the back with their arms crossed who were really bored until we got to following the money. And then suddenly, they came alive, and they were all over it. And they were the financial investigators. The most technical they had ever got was opening Excel spreadsheets and people's banking apps. They didn't understand all this crypto stuff. But actually, when we got to the concepts and the patterns around money laundering, they're like, we get this. We understand this. We understand how they split and move the funds and obfuscate and roll it through different companies or different bridges to different cryptocurrencies. That all makes sense to us. 

And I suddenly realized that we were going to be wrong. And in fact, we live in a world now that where there is some sort of crime reported that involves cryptocurrencies,

We have got the cyber people, we got the digital forensics people doing the discovery, we have got the financial investigators that are tracing and then finding the off-ramp, into fiat currency and bank accounts, and they're doing their thing in that way. And then, of cours,e we've just got, you know, police officer leads that need to bring all of those skills together. And that's sort of where we find ourselves now. If you are involved in any sort of criminology, , is that the right word? think it probably is. Criminality, probably a better word, that involves funds, you need to understand crypto. 

I don't care if you don't know to follow the money or any of that stuff because you're going to roll someone in that can do that, but you are going to need to get it. And I remember having a guy in a training session, and he was just sat there with his arms crossed. And I went to see him at sort of the end of the first day, and I said, are you okay? You know, you're sort of not, you you're all right, you're not really with us. And he was like, I retire in three months. I don't care about this stuff. And you know, I said to him, yeah, fair enough. Don't worry about it. But if you've got some young guy or girl at the front in their 20s just come out of university, and they're getting into money laundering investigations, you need to be on this. It's not going away. You know, even though you always get the sort of the rag type newspapers that on day one are saying, Bitcoin, the most successful cryptocurrency ever, and then the next day Bitcoin is dead. 

Forget all of that stuff, all that rubbish. The technology is sank. It works. It is a way of moving value. It is an asset class, small c. That's up for debate. And so it's not going away. And so if you're involved in any sort of investigations like this, you need to have some sort of foundation understanding as to how it works.

Justin Beals Nick, I'm a little curious what your intrinsic motivations have been, maybe a little bit of what led you to this type of career. As a criminal investigator, like broadly, it's a little unique, I think, to the security industry. And these motivations are, you know, especially for people young in career looking for where they might belong. It's always interesting.

Nick Furneaux Yeah, I have a personality flaw. And sometimes actually get these personality flaws that when in hindsight are sort of your superpower. And that is quite funny, actually, very quick sort of segue. A couple of years ago, my wife suggested I was doing an autism test. And I'm like, what are you talking about? I am completely normal. In fact, I am, you know, as bad as normal as you can be. Anyway, took this autism test. And I mean,I was literally like 30 out of 32 or something on the score and actually started to a lot of reading about it and I've been very fortunate to not only to be able to be very high functioning in that, but also I've learned to mask some of the natural oddities that come with having that sort of mind. But what that mind has given me is the ability to learn stuff really fast, really fortunate.

But the negative is I get bored really quickly. And so I've been doing some really sort cool data extraction stuff and then suddenly got into memory analysis and we taught, I think was one of the best classes in the world on memory analysis and still do actually, we still have that course out there in the wild. And then started to get into some really crazy open-source investigation techniques that we also did and taught to governments around the world.

And the story again, I've told it before so if listeners have heard it I apologize, but I just had a police officer call me who said well, actually, he asked the wrong question he said we've got a computer here from a suspect and it's got Bitcoin on it how do I get the Bitcoin off now some of your listeners will know okay I know why that's the wrong question others may not be so sure I think that's a logical question well the very simple thing is is that cryptocurrency never sits in a wallet, just the private key that controls the record of that crypto on the blockchain. It's sort of like saying when you've got your banking app, I've got $1,000 on my phone. Well, you haven't, of course. You've got an app that controls the $1,000 that's being held by the bank. So it's not a dissimilar thing to that. And I sat there and thought, he's a clever guy, the guy that called me. He is a really good technologist. He's asking me the wrong question. That's really interesting. I need to learn more about crypto. 

And so I took a hard left into crypto, then realized that nobody was getting it really at all. I think in the UK, there was like three police officers that knew anything at all back in 2017. And a couple of them are still good friends of mine. And sadly, I just lost my mum, and I didn't really feel like working. I thought, I know what isn't work, writing a book.

So that's stupid. But I started writing and then just got completely sort of hooked by the concept of Bitcoin and its criminal uses. I just absolutely loved it. The crazy thing was, though, being around crypto from like 2015, 2016, I just always assumed it was for criminals and conspiracy theorists. I never bought any. So,  I mean, back when it was like 1500 bucks, and I could have bought loads of the stuff, nah. And even now, I've got less than $10,000 worth crypto in total, because I still have this mindset that it's for criminals and conspiracy theorists.

Whereas I've been clearly wrong on its sort of financial success. And then once I wrote the book, I thought I was going to be bored. But we started teaching a lot of people, and Ethereum really appeared. Oh my goodness, Ethereum is different, and now there's contracts, now there's tokens. So we're now in 2025, and I'm not bored yet.

And that's what sort of brought me to here. That's almost the little sort of potted history of my life.

Justin Beals That's amazing. Like you, I'm reticent to buy any of it. I've been like, this is a line in a database. I'm not sure I believe in it at all. And not only that, it's a new database and I know how many bugs can happen when I roll one of those out. But I'm intrigued by the tech, absolutely.

Nick Furneaux You know, Justin, I just got to say the Bitcoin source code is some of the most beautiful code ever written. It is extraordinary. The Bitcoin code. It's very clever, and it's never been hacked. So we talk about all these huge Bitcoin losses and massive amounts of Bitcoin getting stolen from exchanges, but that is always stolen from vulnerabilities within the surrounding systems around the blockchain itself. But no one has ever undermined the Bitcoin code. Yeah, interesting.

Justin Beals That was something that your book helped me with a lot. In reading your book, I learned a lot about how the technology works and I gained a deeper confidence in it, especially you as an investigator saying like, hey, I have high confidence in this tech. It's fairly battle-tested. This is not the challenge necessarily, the code, the underlying code that it relies on, but like most things, implementation. 

As a matter of fact, one of the things that I thought was so interesting is you felt like for investigators, blockchain technologies broadly were a boon because of the open ledger. And I thought that was really interesting that open ledgers are of great value to investigators. So I wanted to ask, are all ledgers open? I think there are some that are and some that are not, right? When you're navigating this as an investigator.

Nick Furneaux Yeah, it's a good question. I think what we have to understand is that Bitcoin is a truly independent, decentralized environment. Now, by that, I mean, it's decentralized in lots of ways. We can download Bitcoin Core right now and become a node on the Bitcoin network. We could do it in the next hour if we had a fast enough internet connection. And so suddenly we become a router. We become a node on that.

We could, if we had loads of money and had warehouses and stuff, we could set up mining environments and become part of the mining environment of Bitcoin and so on and so forth. Whereas when you look at lot of the newer things like Solana, for example, Solana is very cool. It's very, very fast. It's very, very cheap. It's great. But it's a company owned by people.

So there's an awful lot of talk about, oh, I said, decentralized blockchain. No, it's not really, not really. Sort of, mostly Ethereum, yeah, sort of, mostly. But really we haven't had another true, true Bitcoin except for things like Monero, privacy coins like Monero. Now that was just built by a bunch of sort of open source developers, it's still open source code and whereas if you go to the Bitcoin blockchain or the Ethereum blockchain, I can see a date and a time. I can see a send address. I can see a receive address in a straight sort of ETH or asset transaction or a Bitcoin transaction, little different with contracts and tokens. I can see an amount. I can see a fee. Boosh. Sort of all the stuff that I would need in order to be able to now follow those funds onwards. 

When it comes to privacy, blockchains like Monero, most of that data is not visible to the investigator. In fact, some of that data isn't visible to the user, interestingly. And so we're in a situation with tools like that, where more complicated methods, statistical analysis methods have to be used to infer movement of funds. But we are finding actually that, know, criminals still prefer the mainstream blockchains because they can see their funds moving as well. They can prove movement to someone to say I have actually moved that money to you. You know, although Bitcoin, you know, does this actually, you might make some money out of it. 

Not not all blockchains are are created equally. And the problem is for people generally is that they just think they're all the same.

This is a good thing, interestingly, Justin, with Bitcoin, for example. I was speaking to a Wall Street banker about three weeks ago, and he was talking about the ownership of Bitcoin. Who owns Bitcoin?

And he was saying about this group that he is part of, won't name them, and just how much Bitcoin they owe. We must be, we must own something like 1 % of all the Bitcoin. I said to him, you do know that it doesn't matter how much Bitcoin you own, don't actually, it's not like shares in Bitcoin. Bitcoin is owned by the miners.

When miners mine Bitcoin, they can all get together and decide on what happens to the blockchain. Little changes to it, little forks to it, upgrades to it. And if those miners want to get together, as long as 51 % of them agree, they can do anything.

And they could make changes to the blockchain that fundamentally drives the dollar price to zero. Remember Bitcoin was never meant to have a dollar price. It was meant to be this standalone currency. And it was only when exchanges appeared that were like these middleman banks that suddenly we went Bitcoin is worth X. I get this all the time when I put a report into a police force.

And I say, yeah, the guy stole 3.2 Bitcoin, they always ask the one question. The first question, I always know it's gonna come out of their mouth. How much is that worth? Well, the answer is 3.2 Bitcoin. Yeah, yeah, but how much is it worth? I'm sorry, is there an echo? 3.2 Bitcoin. Because actually the whole transaction over to fiat currency is based on what? It's not even based on fiscal policy, like it would be within a fee. It is literally based on what somebody is willing to pay for it. It is the art of money. 

You know, how much is willing someone willing to pay that Picasso? Well, it just depends how much it goes for at auction. And unfortunately, that whole thing, is, and it is remembering that the miners, so until China banned mining, Bitcoin was a Chinese currency. Because often, 51 % of the mining that was happening was in China. 

You know, you said you haven't bought it. Well, this is sort of the reason I haven't bought it actually, is that, you know, who are the miners? Can we trust them? Do they have our best interests at heart? And I see these like trust funds now, you're like buying a hundred million in Bitcoin. I'm like, okay, I think, as long as the miners continue to play ball, Because they own the code if you like. They own the changes that they can make. It's really interesting. It's fascinating.

Justin Beals:Yeah, it's like they know enough to be dangerous. They apply the style of like fiat currency or commodity or share ownership to this concept. But this code that is a concept realized has no intrinsic value. It is a public good in a way to the miners that participate in it and operate in it.

Nick Furneaux  Yeah, and I think this is where in my first book, I use the example of the island of Yap that has stone money. And why do these huge stone coins have a value? And it's because if someone wants a stone coin, they've got to build boats, they've got to employ sailors, they've got to employ miners, and they actually sail to Palau where they get these cult site coins out of the ground and they whittle them into circles, they put them on the boats, they bring them back. So by the time those stones get put somewhere on the island of Yap. 

It's cost money to put them there real sort of pseudo dollars if you like to actually put a coin there, and that's the same with mining Bitcoin You've got to buy mining rigs. You have to power them. You have to cool them You have to, you know, have a bit of an infrastructure around them for that to work And so every time a Bitcoin is generated that somebody just did the math, which is all it is very simple mathematics.

Well, very simple mathematics, it's very hard to achieve. Not quite the right way of putting it, it's actually cost money to create it. So they do have an inherent value because it's costs money to put it there. Does it cost $100,000 a Bitcoin to put? No, it doesn't. That is just down to, let's be kind and call it market forces.

So now, don't get me wrong, I'm saying like I'm being really critical. I'm not, it's an amazing code base. It's an amazing way of creating money and creating asset. I'm just very aware that if we don't have truly decentralized mining, you know, Bitcoin becomes owned by a very small number of potentially, which is scary. A lot of people don't understand that.

Justin Beals Yeah, that's scary. Yeah. Well, there's so much perceived value invested in ownership or the appearance of a Bitcoin in your wallet that you could ameliorate a lot of people could lose a lot of money. 

One of the things that I felt I read in your book, and I want you to correct me if I'm wrong, kind of like Bitcoin blockchain is a version one of blockchain technologies and the Ethereum style blockchain is almost a version two and certainly there are later. Is that a good way to think about it, and what's the major differences between the two?

Nick Furneaux The fundamental differences is that Bitcoin was designed to be a point-to-point transaction of value. That's what it was there for. So really, no difference to me meeting you in the street and handing you 10 bucks. It's a point-to-point transaction system, which was, at the very least, pseudo-anonymous. We use Bitcoin addresses that are. There's no directory of Bitcoin addresses.

And so for tools like TRM Forensics, I work for TRM a few days a week, so vested interest, other tools are available. They have to work very, very, very hard to build attribution of those addresses so that we can begin to understand who's received them or off ramps exchanges, things like that. When Ethereum came along, it was a fundamentally different concept of, yes, being able to move value from point to point, but also had an underlying development engine that enabled you to build programs on top of the blockchain. So that might, for example, include building out what we call stable coins, tokens like Tether, USDT, Circle, USDC. And you could build these tokens with a sort of a set value or variable value.

And then you could build programs to enable you to take your Ethereum and swap it for one of those tokens. Or you could build logic so that you could place a virtual bet on a virtual spin of a virtual roulette wheel. And the logic and random generator behind would decide whether you had won or not.

Then generate tokens back to you that you could then change back into ETH and back into. So it was this ability now to be able to build functional programs on top of the blockchain, which was doing all of the financial logic. That's what it makes sense?. And that's where that was very different. And then we have tools like Tom, which part of Telegram, and then we've got tools like Solana that are almost free to do transactions, enable you to spin up tokens very, very quickly. know, meme coins like, you know, obviously the Trump and Melania meme coins are probably the most famous in recent months. Very, very quick to be able to spin up these coins, these tokens for very, very, very, very cheap, and to be able to do transactions very, very quickly. So that's sort of where crypto is going. But you've got to remember these are not, I mean, seriously, I'm going to get a letter from a lawyer, but they're not truly decentralized as Bitcoin is. They are owned, I'm not critical of that at all. I'm not saying it's good or bad, but they are owned by companies that have a vested financial interest in the success of those tools, of those blockchains.

Justin Beals I mean, it's, it's a part of security broadly where we understand the people we do business with, right? Like who they are, what their motivations are, you know, what, you know, Solana is, is we could say it's good or bad in, do I want to build my coin or my smart contract on that platform? Certainly, but we're not necessarily making a moral judgment, you know, broadly of the tech. One of the things that I think has been the most prevalent

I don't know if it's a crime or it's bad behavior or it's somewhere in between, but you describe it as the rug pull, and it's been the most prominent, you know, in the market. We can talk about the Melania and Trump's points because I think that's an example in a way where people feel that it was of that type of issue. Do you describe that as a crime and help illustrate for us how that works?

Nick Furneaux Yeah, okay. So let's just talk about how it works, first of all. So what I do is I jump onto Ethereum or Solana and I build up a coin called Justin coin. Tell you what, let's call it Justin case. Justin case, we're gonna call it. Justin case is successful, okay? So it's the Justin case coin. And we build this coin, and we say that there's gonna be a hundred million of those coins. And...

Justin Beals That's a good coin, Nick. I like that one, yeah.

Nick Furneaux And then we put a story around it, you know? So what we're going to do is we're going to build this company around your reputation, around your podcast. And, you know, if you listen to the podcast, you're going to get some Justin tokens. And then we get some Zed Lister celebrity influencer person to hold it up on their TikTok to say, Justin Kisscoins, they're the best thing ever.

And this has happened a lot, by the way. And there are enough people out there probably just using AI to watch coin quotes. And they will just buy some of those coins. So how do they buy them? Well, you have to buy them through a swap contract. So what you have to do is you change some of your real hard-earned dollars into ETH. And then, we set up a swap contract that swaps ETH to our just-in-case tokens. Okay?.

Now what we do, Justin, is that you and me, because I helped you set it up, there's gonna be 100 million of these, and we hold on to 80 million of them.

And then what we do is that we sell by sort of pumping the interest in this coin and we sell through this contract. So what people are doing, they're getting real ETH in the contract and they're swapping it for just in case coins. Now, every time someone does that, what's called the market maker says, there's a lot of interest in this coin. I'm going to change the value of the just-in-case coin because there's a lot of people that want to swap to that coin.

So the price, so let's say if it starts off, you you can buy a million of them for one ETH, let's say. But as it gets more exciting, you actually need a lot more ETH to buy a million of them. And so you get this change. And what we do is we pump it until we're super excited. And then we take our 80 million tokens and we dump them out to ETH for a much, much higher amount. And basically, we drive the value then to zero because the market maker goes,

Whoa, someone just sold 80 million of these coins. They're now worth basically nothing. And we walk off with all of the ETH of the people that had, can I use the word invested? Even though I guess it was punted, can we use maybe that? And so they, you call it pump and dump or road pools where basically the creators, as soon as it's got to a value, they pull the money, they walk away. So there was a 13-year-old lad on Solana just back in November and on his live stream, created a token, people started swapping souls for the token, and then he quickly sort of sold all of his and walked away with $30,000. You know, is that a game? Or is it illegal? Is it, you know, he wasn't pretending, he wasn't pretending to be Bitcoin, he wasn't pretending this was gonna be the most valuable thing ever. People just put money into it. Now,

Justin Beals Yeah.

Nick Furneaux I think we had one a few years ago, what's it called? Squid Game on Netflix. And then these people came out with the Squid Game coin. Everyone thought it was related to the series on Netflix. So loads and loads of people, and they never said it wasn't. And all of the iconography and everything was all very similar to the TV series. And they sort of suggested there was gonna be this like game that was gonna be released. And so loads of people put money into Squid Game tokens, and then the creators just, You know, changed all of their tokens back into actual convertible crypto, and walked away from it and dumped it to zero. I think if you're telling a lie about something, it becomes a crime, doesn't it? If you're just, you know, it's really, really difficult. yeah, 

I remember sitting in, there was a very interesting one on something called Mango Markets, where a guy actually used MangroMarket's own market maker of logic against it and managed to pump the value of a token and walked away with an eye-watering amount of money and then tweeted about it or X'd about it as it is now, but at the time tweeted about it and said, hey, look what I managed to do. 

And I actually sat, I was actually giving a talk at the American Embassy in London and the person who I was speaking with actually said to this group of law enforcement who thinks this was illegal, and only half the hands went up in the room because no one was really sure the guy had used the contract to do what it was meant to do, but the result it was clearly not meant to do that.

And so you get into these very difficult sort of moral judgments. Now, actually, the US authorities did take action against the person and all the rest of it. But some of these things are not that clearly defined. It's really tricky.

Justin Beals  Yeah, it's really tricky. was, now, anytime, having been a software developer in my past, anytime someone says you can program on top of our platform, all of a sudden, the security boundary gets really massive, right? And to analyze what it is you're buying, you need to be able to read the code. Because that is, you know, like, oh, I only let my lawyer read the legal document. You know, if you're buying one of these tokens that's based on a smart contract, not being able to read the contract. What I learned in your book is danger, danger, danger. You don't know what you're buying or think you're owning at the end of the day. Yeah.

Nick Furneaux Yeah, I mean, so some of the contract might be available to read, it might not be available to read. And even if it is, just how many people can read a contract and go, oh, that's interesting. We have an ownership clause that means you can't sell your coins once you bought them for 150 months or something. you know, mean, sort of digging that out of the code is really difficult. 

And I think you know, this is where like the Trump coin, for example, you know, they actually, think Trump holds a quite a large percentage of the coins, but the contract says he can't sell them for like five years or something. I'm making that up. can't remember what it is. So, you know, is that a rug pull? I don't think so. I think they're being quite upfront about it. But loads of people put loads of money in and the value has dipped. Well, that's what happens with investments. But what are they investing in really?

What was it? There's no underlying company value there. Are we connecting the value of that coin to the popularity of Trump himself? You know, I'm not making a political statement here in the slightest. It's just it's very unclear as to what the point of it was.

Justin Beals Yeah. One thing that I wanted to give a little space for is TRM technologies and the work that their platform does. Could you help describe some of the investigatory tools that are available and how they help? Yeah.

Nick Furneaux Yeah, yeah, absolutely. And this is really important. mean, I've always taught people to learn how to do things through open source methods, you know, and, and what I love about TRM, in fact, TRM came and bought my company CSI tech was teaching people how to do cryptocurrency investigations using open source tools. And what is great about TRM and why I decided to sort of you know, sort of jump into the proverbial bed with them is that they also feel that is very, important. So, for anyone that doesn't know that the TRM Forensics Investigative Toolkit enables you to, you know, let's say, take an Ethereum address, plot that to the screen and then say, right, where did funds come from? Where have they gone? There's now AI tools to detect cross-chain swaps and we can actually bridge over to other blockchains and be able to follow the funds.

So as you can imagine, with the big North Korean theft just recently, TRM are working really, really hard with Bybit to be able to trace those funds, to be able to warn, say to exchanges, hey, money's coming to you, do something about it and work very, very closely with governments, with law enforcement, to enable them to be able to not just trace the funds in a nice pretty graph, but critically the attribution of addresses. 

So , that we know when we have hit an exchange like Coinbase or Binance or whoever it might be so that we have some chance to go to that exchange and say, hey, we're tracking these stolen funds. So we think this might be criminal funds. Can you freeze it until we can get some sort of court order in place and so on, so on, so forth? you know, as I say, other tools are available, but the TRM toolkit is the one that gives you the access to a very, very wide number of blockchains, a very, very wide number of tokens, to give you the best chance to be able to follow stolen funds to a place where we can stop them moving or understand when they move out into fiat currency. So that's fundamentally what TRM does, and they do it extraordinarily well.

You know, go and do your own research if you're in the market for one of these tools. you know, the reason I accepted their offer for us to sort of go under their umbrella is that although I was using other tools that were available in the marketplace, I found myself using the TRM toolkit more and more and more and more. And then when that offer came in, I was really happy to align myself with their vision.

Justin Beals That's great. And I did do a little research, you know, the pace of innovation around these tool sets, I think, is married with the access to data in a way, which has allowed it to go really far, really quickly from a investigatory tool or an analysis perspective. And you got, it is a competitive market. know you guys are driving each other a little bit with the other tools in the marketplace, which is great for the consumers, you know, to continue to get good tools. Yeah.

Nick Furneaux It absolutely is. you know, we never just want one tool on the market doing something, you know, you need that sort of competitive drive to try and always be better than your competitors. You know, but fundamentally, and this is again, one of the things I like about the culture within TRM, is their desire to do good. Their desire to try and find funds to get them back to the victims to try and predict crime, to understand when it's happening in real-time, to use the very,very latest technologies to be able to help law enforcement fundamentally to support victims. Have you ever had Aaron West on your show? So Aaron is fabulous, and Aaron is championing the victim of crypto-oriented crime at the moment.

Justin Beals: Not yet, but we're always...

Nick Furneaux: and is literally going out to the Middle East, or not Middle East, out to the Far East and identifying these huge scam compounds and just trying to make the world understand that actually, if you go back 10 years, when someone phoned you up and pretended to be from your cell provider or something, they were a scammer. Now, the likelihood is that the scammer themselves is a victim.

Because they're now trafficking thousands of people across borders in Thailand, Cambodia, Vietnam, and saying, there's a job for you, but then they go into these compounds, they can't get out, they've got targets. There is many, many reports of physical abuse, mental abuse, rape, terrible things happening to people when they don't hit their scam targets. So we are in this weird world now where the victim is a victim, and the scammer is a victim.

And it's becoming a complicated world to live within. So we now need to be identifying the groups that are driving these big scam centers and scam compounds.

Justin Beals: I mean, we've seen this. mean, we see this in other criminal enterprises going at scale, right? It's not the street level dealer that is our real challenge. It's a cartel potentially and everyone has been caught up in the suffering. Yeah.

Nick Furneaux: And the problem is, Justin, you know, they're getting good. you know, AI is now driving, driving scams. You know, I built a training video a few years ago on recognizing scam emails and recognizing scam text messages. But the problem now is that they're not poorly written by someone that doesn't speak English is a first language because AI is going, I can write that in the Queen's English for you with no grammatical errors. And, you know, I'm almost at the point now of saying look for the absence of errors, you know, because if I write a text message and it's a, I may well make a spelling mistake. I mean, a text message I just sent to my buddy, I spelt there T-H-E-E-E, because I was typing quick.

You know, and I didn't, because, you know, AI is now making, I can now write a really great scam email in French, and it's going to be bang on perfect. So AI is going to make our lives significantly harder, which is why companies like TRM are implementing AI systems to enable to do investigations at scale, investigations at speed, you know, the speed of AI.

Because we're going to have to take the fight to the scammers that are using now these engines to be able to generate things at high speed and at very high quality, it's a problem.

Justin Beals: Yeah, it's a problem. You know, full circle, like back to how we started this conversation and there is no crypto crime. As I was wrapping up reading your book, I was pretty floored by the idea that some of these issues we've seen before, I'm kind of a history buff. And I've been reading a lot lately about the printing of monies in the American colonies shortly after the revolution. And there was a real issue because we didn't have a national currency so much or it was coin based, but we had a lot of banks that would print their own notes and that led to scammers creating their own notes, distributing them. And there's court cases of someone where they're like, well, they bought a horse for me, but they used a note and I went to the bank, and the bank didn't recognize the notes. I couldn't get actual dollars out of it. And that's how this person stole from me.

And it was hard at the time for the justice system to even grok what was going on.

Nick Furneaux: It's a great sort of historical comparison and the comparison of law enforcement having to catch up. And we often kick law enforcement, why can't they do more about this? Well, I mean, they're having to be experts in like, every type of crime that is developing at super high speed. And we have this problem where, okay, the US, the UK, and they have funds and have training budgets and all this sort of thing. But then you go to Southeast Asia, you go to some countries in South America, and how are we supposed to get police officers on the street to recognize when this guy has actually put all his drugs, money into crypto? The training just isn't there. And it's a catch-up. You're literally playing whack-a-mole all the time. It's tricky.

Justin Beals: It’s a hard job, but we certainly are grateful for your passion for it, Nick, and your community's passion for investigating these things. You know, these tools, I think, can be powerful for good, we can reduce the cost of sharing wealth between individuals that want to in a way that is legal and above board and something that, you know, makes banking tools more available to a broader community.

But of course, we want to have those be trusted and limit the opportunity for people to be scammed or lose their hard-earned assets.

Nick Furneaux:That's absolutely right. Yeah, they meant a lot.

Justin Beals: Well, thank you for joining us today, Nick, on the podcast. I'm excited to stay in touch. These are constantly evolving technologies and I've just gotten a taste now through your book. So yeah.

Nick Furneaux:  That's great, sorry I've been in such a chatty mood today, so I hope that some of it makes some sense to your listeners and that wasn't too tedious to listen to.

Justin Beals: Not at all. It's wonderful. All right, Nick, have a great day. Thanks for joining us.

Nick Furneaux: It's lovely to see you.