Blockchain Intelligence is Protecting Crypto From Fraud & Crime! | TRM Labs Ari Redbord

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We have the largest database of fraud and financial crime
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and human history. Every transaction on a public ledger is
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logged and immutable.
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It's there forever.
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I think that we're living this really interesting moment where
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the private sector has all of the data and the
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public sector has all of the authorities. And our job
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at TRM is to make sure that the public sector
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has the data that it needs. Clarity will pass. We
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will one hundred percent have a crypto market structure bill.
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We're going to get something, whether it's now or whether
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it's later.
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This episode is brought to you by Fordax. Guys, Let's
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be honest, the crypto market has been moving sideways for
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a while now. A lot of people are just sitting
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on their coins waiting for the next big move. But
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while you're waiting, your crypto is just sitting in your
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wallet doing absolutely nothing. That's why I want to mention
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one of my longtime partners, FORTASX. Instead of just like
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your assets sit idle, you can put supported cryptocurrencies into
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fortestx liquidity pools and earn daily rewards while still keeping
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the flexibility to withdraw whenever you want. One of the
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reasons I've continued working with them is because they keep delivering.
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The team is public, They've successfully completed Cyberscope team verification,
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KYC past independent security audits, and the platform has been
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building consistently for years. They've focused on long term growth,
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transparency and security rather than hype. In a market like this,
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it makes far more sense to have your crypto working
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for you instead of letting it sit idle in your wallet.
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I've worked with fortest x for a long time and
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if you're planning to hold your crypto anyway, I genuinely
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think it's one of the smartest ways to put those
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assets to work. And folks, I know security is very
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important to all of us as we hold our crypto
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assets and they are fully audited by certain and they
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are sec registered and much more so. You've got to
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check out fort x. Go to fordest x dot fi
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slash x slash Thinking Crypto link will be in the description. Hey, folks,
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welcome into the Thinking Crypto Podcast. I'm Tony Edward and
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I'm Amanda Wickcroft and joining us is Ari Redboard, Global
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Head of Policy at tim Labs, which is a blockchain
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intelligence company that helps the financial institutions, crypto businesses, and
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government agencies detect and investigate crypto related financial crime and
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fraud ery. Great to have.
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You, hey, Tony Amanda, Thank you so much for having me.
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Really looking forward to the conversation today.
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Absolutely, we're excited to chat with you. I think it's
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very timely for us to be having this conversation with
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the backdrop of crypto legislation about to make it through
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the Senate with the Clarity Act and much more. You
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have law enforcement agencies weighing in and giving their endorsement
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for the Clarity Act and much more.
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So.
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Lots to talk about, but we love to kick it
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off with your background. Tell us about where you're from
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and how do you make your way into the government
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and then into crypto.
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Yeah.
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No, absolutely, and again thanks for having me. Prior to
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joining TRM about six years ago, I spent about eleven
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years as a federal prosecutor. I spent much of that
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time in the intersection between money laundering and national security,
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what I call threat finance, essentially stopping bad actors from
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getting the money they need to do bad things. So
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I think terrorst financiers, sanctions, criminal prosecutions, export control, cyber
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North Korea. After the Department of Justice. I spent about
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two years at the US Treasury Department, working in the
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office that oversees the National Security Apparatus there so OPAC,
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the Office of Foreign Asset Control, which is our sanctions
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regulator in the US, FINSEND, a Financial Crimes Enforcement Network
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which is our financial intelligence unit, and a whole bunch
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of other sort of components that really try to stop
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bad actors from accessing the global and certainly US financial systems.
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As I said, I joined TIRAM about six years ago
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after again close to fifteen years in the US government.
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We were about seven people at the time, were about
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four hundred and fifty today globally. It's been this just
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incredible journey. I've never worked harder, I've never had more fun,
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never felt like I've done, you know, more meaningful work,
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even as a prosecutor. So it's been a really extraordinary
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adventure in the crypto ecosystem.
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With regards to the transition into crypto. Did you see
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this technology? You know, at what point, I should say
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what point did you see this technology? And was it
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what was your aha moment that you saw, Well, this
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looks like it's going to be the rails for the
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financial markets and things along those lines.
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You know, so interesting.
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I wish I had a better crypto origin story, like
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I bought bitcoin in like twenty thirteen or something like that. Right,
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I probably wouldn't, you know, I'd be driving around my
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lambou somewhere.
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But it was a little different for me. It's very
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much as a prosecutor.
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You know.
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I was investigating cases pretty early twenty fifteen, twenty sixteen,
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seventeen involving North Korea, and their crypto playbook was very different.
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Back then.
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They were really using bitcoin to launder funds. North Korea
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is a country that has no economy whatsoever. It's essentially
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a banana republic, and it's a criminal regime that has
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basically tried to figure out ways to launder funds for decades.
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Whether it was counterfeit hundred dollars bills, whether it was
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counterfeit tobacco, counterfeit cigarettes, whether it was hacking Sony pictures.
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You might remember, trying to steal a billion dollars from
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the Bank of Bangladesh. This was all before crypto. And
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what I started seeing in those early days of those
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investigations was North Korea really looking to bitcoin. And I
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said to myself, well what is this and kind of
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went down that rabbit hole a little bit to understand
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it and realized like, wow, I'm seeing bad actors use
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this at scale, but wow, what just an incredible use
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case for lawful citizens and what a particular like, what
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a possible revolution this technology is when it comes to money.
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So I think for me it was very much like, Hey,
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how do I stop bad guys from using it? But
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I think as part of that journey, realized how just
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incredible a technology is for good and how we have
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to really leverage blockchain technology in order to stop these
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bad actors.
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Yeah, you're not kidding about North Korea being the Banana Republic.
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I was just reading about that investigative journalist Nick Sureley,
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who everybody loves with all the exposure that he's doing
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with the tax fraud, and I think I just read
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about the daycares that North Koreans are, the amount of
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money being poured into I forget this city. I think
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it might be New York City, but the amount of
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money being put into that's it's a shame that that's happening.
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But can you give us a quick overview of TRM labs,
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The history mission.
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Yeah.
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Absolutely, Tarms a blockchain intelligence company. Essentially, what that means
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is we provide training and tools to investigate illicit activity.
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We allow law enforcement to trace and track illicit proceeds
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in crypto in order to build investigations. He's back funds.
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I think what's missing in a lot of conversations around
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law enforcement, and Tony kind of got into the clarity
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act a little bit is we have never had more
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visibility on financial flows, illicit financial flows than we do
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in crypto. Every transaction is logged and immutable on a
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public ledger, immutable meeting.
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It's there forever.
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My colleague Christian Chesky, who is a former IRSCI investigator,
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probably he hates when I say stuff like this, but
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probably the most famous crypto investigator ever. He was the
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protagonist in Andy Greenberg's book Tracers in the Dark. He
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and I were on this Netflix documentary called The Biggest
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Heist Ever together talking about the Bitfinex hack. He calls
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blockchains like the greatest crime scene that he ever had
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access to, right because you can investigate cases going forward,
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you can investigate cases going back in time, right to
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the first ever transaction, and really it's an amazing tool
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for investigators. So we provide software to law enforcement agencies globally.
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We provide software to regulators. They want to understand, Hey,
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this cryptocurrency firm, this exchange is looking for a license
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wherever it is in the world, New York or Singapore
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or somewhere else. They use our tool to make a
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licensing determination and then going on to supervise that entity.
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And finally we work with the private sector. So we're
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a compliance solution to think every large major cryptocurrency exchange,
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think every large financial institution that's all of a sudden
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sort of coming on board into the crypto ecosystem, and
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they use us to ensure that bad actors aren't accessing
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their platforms. So you mentioned North Korea, and you know,
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every large financial institution that's providing crypto custody, providing access
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to assets to their customers. They want to make sure
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that North Korea, the terrorist financiers, that ransomware groups, that
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cartels are not accessing their platform So we provide that
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type of service. To think of it as you know,
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anti money laundering for crypto and really more and more beyond.
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I think we can get into this as well later.
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But AI has really enabled us to not just take
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that rich on chain data, but combine it with really
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rich data sets off chain to do holistic investigations in
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crypto and beyond.
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Pardon the interruption. Hi, I'm Tony. I'm the host of
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the Thinking Crypto podcast. I wanted to ask you if
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you can please support the podcast by hitting the like
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button subscribing. If you haven't as yet, you can leave
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a comment below as well. And if you're listening on
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a podcast platform such as Spotify, Apple or wherever you
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get your podcasts, please be sure to follow and hit
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the five star rating. I'll let you get back to
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the content. Thank you so much.
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From a tech perspective, and I don't know if this
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is a dumb question, we'll see, but I know that
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blockchains are limited in terms of the data that they
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can actually extrapulate, so they partner with companies like chain
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link Labs so that there's more data that they're able
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to actually to receive. Does that affect in your investigations
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at all as far as when you're using the blockchain
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as a starting point to investigate.
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It was interesting? Yeah, no, I mean we have the
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largest database of fraud and financial crime and human history.
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I know that sounds crazy, but every transaction on a
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public ledger is logged.
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And immutable, like it's there forever.
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So when you start to talk about, like, all right,
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where are databases for fraud and financial crime? Right, finn Send,
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The US Treasury Department holds something called the SAR database,
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the Suspicious Activity Report Database. It's alerts that are coming
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from banks, financial institutions, crypto businesses. We are magnitudes larger
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than that because we see every transaction in real time.
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So every transaction that is occurring on a blockchain, is
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on a public blockchain, is visible to us. So think
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you know bitcoin ethereum, Solana polygon tron. Where we lose
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visibility today is when funds are moving in and out
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of cryptocurrency exchanges, right, because those are going off chain
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and onto order books. And that's that's fine when you're
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talking about a coin base or a binance or a
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crack in or someone who's responding to law enforcements. But
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harder when you're talking about sort of non compliant exchanges
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in Russia or Chinese OTC brokers right that aren't that
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don't have KYC, that aren't doing compliance controls. But you know,
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DeFi comes up in a lot of these conversations, and
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I always come back to, look, we can see every
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transaction occurring in DeFi that's happening on blockchains, right, those
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are the ones we see. I think where things get
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a little harder is when funds are moving off chain.
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But I think now, as I said, like things we
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couldn't even do six months ago, like take rich threat
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intelligence human intelligence data and combine it with on chain activity,
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using AI has really revolutionized the way you can do
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these types of investigations.
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Hopefully that was helpful in.
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Regards to the evolution of blockchain intelligence. Are criminals getting
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more educated about this that they're trying to avoid crypto
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now maybe going back to cash and other means of
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exchange of value or you think that that education is
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not there, and he still continue to try to use
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the technology, but they're getting caught because the applications and
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what tier M labs and you folks are doing has
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you know, obviously grown and evolved and you have more
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advanced technologies and so forth.
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It's interesting, like not the wax too philosophical, but you know,
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like bad actors are always early adopters of transformative technology.
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I tell this story all the time. I want to
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say it was like nineteen eight the model t Henry
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Ford's model t rolled off the assembly line. And that
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was actually the first year that we created what they
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called the Bureau of Investigation, which has now the modern FBI.
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And it was because we realized that policing was no
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longer local, that bad actors can move across state lines
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at unprecedented speed and scale. I think Body and Clyde
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and al Capone and machine gun Kelly, right, So we
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needed a federal police force that could, you know, jump
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in those vehicles and follow the as bad actors across
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state lines, you know, move fastward to pagers. I'm old
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enough to have used a pager when I was a prosecutor.
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In the early days, the only people using pagers were
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US and the drug dealers, right, cell phones and to
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end encrypted messaging apps. Today it's crypto and AI right.
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So I'd say there's always this cat and mouse game
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between bad actors and law enforcement. Bad guys are always
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trying to use transformative technology, and we're always trying to
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catch up. And I think what we're seeing with crypto
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is essentially that we still see illicted activity as a
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tiny percentage of overall illicit activity somewhere around two percent
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or so is pretty conventional wisdom. That's significantly less than
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what we're hearing out there in terms of fiat currencies
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or traditional currencies, which I think you usually hear about
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five to eight percent in terms of that type of activity.
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But when I'm when I tell you what we see
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about two percent, and when it's like, well, five to
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eight percent, it's because you don't have visibility the way
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we do in crypto, right, Like we're talking about at
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works of shell companies and jwalas and bul cache smuggling
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and high value art. So cash is a lot better
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for money launders than crypto. And that's that's very much
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a conversation I'm having a lot with policymakers and have
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for years in Congress and other places, particularly around clarity
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right now as well as you mentioned.
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So Aery, are you telling us that tirm Labs is
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the modern day digital sing thing? Oh? I like that.
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I like that.
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I think of more as I like to I think
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of myself more as like the elliot ness of of
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of of modern day investigators or something like that.
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I want to congratulate you on tier M MCP. I
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believe you guys announced that early last week. What is
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this and what does it do?
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Yeah?
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Absolutely, I think it's like it actually is like a
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broader conversation, which is really cool. And that is how
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we can integrate AI into tooling. And I think this
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is a great example of how you can integrate AI
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into compliance workflows. We have built in capabilities in our
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actual tracing tool where now law enforcement can click on
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a button and auto trace transactions using AI. But to me,
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I think the most really revolutionary piece to this is
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how we can use AI tools to combine that on
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and off chain component. And this is all sort of
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building towards that, and that's what we're really working with
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law enforcement and financial institutions today. You know, we don't
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think of it necessarily as blockchain intelligence anymore. It's now
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this sort of AI powered intelligence where we could build
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out networks not just of on chain activity. You know
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that Like you know, think about our the graphs that
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you see in the public domain all the time and
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the reports that we put out. Now we can take
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those and say, well, hey, now we see that on
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chain picture, let's marry that up with beneficial ownership, information
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about the business, where's the corporate registries? Is there shipping data,
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is there, threatened intelligence data, human sources? And that's really
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I think this evolution, and this is a great example,
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is really building towards how do we use AI power
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tooling to do investigations better and to do compliance better.
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How are you preparing for the AI agent economy where
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where you have KYC where you can track a customer
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and some of the things that may be doing the
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connected wallets. But if I have a hundred AI agents
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doing different things for me and some of them are
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doing bad activities, I'm a bad actor. I'm trying to
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take advantage of companies and so forth. How do you
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kyc so to speak the AI agent and track that
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back to the bad actor?
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Tony, we are in just an extraordinary moment in human history.
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I don't I've never seen anything move as fast as
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as as AI, not the Internet, not crypto, and of
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course we're seeing bad actors really adopt it at scale.
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And you ask anyone, I'm the most positive guy in crypto,
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you know. I think I think sort of famously, so
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that's why I'm terrible on Twitter or x. But but
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this is an area that I that that makes me
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very nervous. And if you ask me sort of what
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keeps me up at night, it's exactly this question we're seeing.
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We saw a five hundred percent increase last year in
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AI enabled scams and fraud. So think deep fake videos,
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think really tailored phishing attacks, right, you know, it's no
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longer like hey, you know, I'm a Nigerian prince scenario.
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It's you know, hey, Amanda, this is Tony with your
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voice and your image. Can you send me money? I'm
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in the hospital, right Like it's your child, it's your mother,
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you know, it's it's a celebrity. So we're seeing that
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really happen at scale. And what concerns me about that
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is it really just takes the friction out of scams.
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You know, you don't need a one off transaction anymore.
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You can have hundreds, thousands, millions of agents working around
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the clock. They don't need food, they don't need to sleep,
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they're just constantly scamming. Last year, Americans lost well globally,
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we saw about thirty five billion in scam losses. Within
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the crypto ecosystem. Only about fifteen percent of victims report,
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so that number is probably closer to two hundred billion.
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I mean that is a global scourge we're seeing ransomware groups.
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Just last week it was reported that the first ever
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end to end AI ransomware attack took place where there
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was no human involvement whatsoever. So what does that mean.
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It means that if hospitals are the number one target
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for ransomware actors, which is true today, that means that
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we don't have to worry about one actor anymore. They
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can have millions of agents attacking hospital systems at scale.
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That's not a law enforcement issue. That is a global
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civilization level threat and we need to figure out how
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to combat it. But I told you I'm the most
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positive person in crypto, So I have an answer for that,
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and that we have to use these tools right. Law
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enforcement compliance professionals need to have access to them. And
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that's really that's like how we see that's how we
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see our place in the world, is how can we
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enable these types of mission outcomes for law enforcement agencies,
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for national security agencies to actually stop these attacks from
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happening in the first place, to get money back to victims,
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and to disrupt the criminal networks that are doing this activity.
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I'll stop rambling, but I'll kind of say this last piece,
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and that is like, these aren't one off criminals right
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in their mom's basement or something. These are transnational criminal
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organizations that have industrialized this type of activity. So the
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US government, working with other authorities, the UK and others,
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about six months or so GO took down a group
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called the Prints Group, which operate at the highest levels
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of the Cambodian government. We ended up forfeiting about fifteen billion.
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It was the largest seizure in world history or the
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largest forfeiture action in world history. But that's that's one
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of I don't know, twenty twenty five, thirty fifty compounds
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just like this, where there's human trafficked workers that are
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scamming you know, Westerners and an American citizens. So these
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are huge problems, but we have the technology combat it.
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We just make make sure that the good guys have
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the technology as well.
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With the convergence of AI and crypto evolving so so quickly,
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and I didn't even think about that with people use it,
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you know, the deep fay. Of course, I understand what
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deep fake is. I understand that people are using other
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people's voices, but with regard to that type of money,
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you know, take away the fraud obviously being a legal activity,
386
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how is it handled when somebody is using your voice
387
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without your permission? Is that is that something that Yeah?
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I mean, you know, look like I am, I'm a lawyer,
389
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you know, I think that, Like, there are some really interesting,
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thorny legal issues when it comes to AI. I testified
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about a year or so ago. It's crazy, it feels
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like longer in the first ever hearing on Capitol Hill
393
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on AI crime, and that question arose a number of times.
394
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It's sort of like, you know, it's your name, it's
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your image, it's your likeness, you know what what what
396
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do you have there? Conventionally it's like, you know, there's
397
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there's a I think they call it the Elvis law,
398
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where like this whole idea of like someone stealing your
399
00:21:17.319 --> 00:21:22.519
your your voice or you know, you potentially have civil ramifications.
400
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But I think there's all kinds of interesting questions that
401
00:21:25.559 --> 00:21:27.680
arise with this that are a little outside my wheelhouse.
402
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But like from from being able to use that type
403
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of information, I think we need to update our criminal
404
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laws also in terms of how we think about bad
405
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actors using AI. We have federal sentencing guidelines that have
406
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upward departures that go up based on certain activity. I
407
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think probably using AI to scale is probably one of
408
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those that should increase your sentence. But there's all kinds
409
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of like, I mean, fat, fabulous, fabulous issues out there
410
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that I you know, you step back back from the fear.
411
00:22:03.240 --> 00:22:06.640
Justin Wales, who's a friend who's the general counsel for
412
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crypto dot com, wrote a book recently. It's like AI
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law Legal Handbook and is a great read and it
414
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goes through issue by issue and I thought to myself, Gosh,
415
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to be a law student today or to be a
416
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young lawyer and grappling with like questions that will be
417
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legal precedent right that there's just no legal precedent on
418
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any of this today, and you're really building it, you're
419
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writing the law books as you go. And I think
420
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that's just an incredibly just energizing point where if you're
421
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a young lawyer today, I feel like an interested in
422
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technology and this stuff. I just feel like, wow, just
423
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the sky's the limit in terms of what you can
424
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do and build.
425
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What are the top growing scams using crypto technology? Is
426
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it ransomware?
427
00:22:51.000 --> 00:22:51.440
Malware?
428
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Things like that.
429
00:22:52.519 --> 00:22:54.440
Yeah, No, it's interesting, you know, like there's a whole
430
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host of different types of criminal activity when it comes
431
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to crypto, and I want to be really clear, like
432
00:22:58.880 --> 00:23:03.039
when I talk about these things, you know, criminal activity
433
00:23:03.079 --> 00:23:07.240
is still a tiny part of the overall crypto ecosystem.
434
00:23:07.960 --> 00:23:10.599
But the reality is that bad actors always go to
435
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where the money is, and the money is in crypto today.
436
00:23:13.559 --> 00:23:18.279
So we follow you know, fifty one hundred different typologies,
437
00:23:18.359 --> 00:23:22.920
so everything from ransomware to terrorst financing to child sexual
438
00:23:22.960 --> 00:23:25.000
abuse material to scams.
439
00:23:26.440 --> 00:23:29.279
We follow sanctions violations very very closely.
440
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So think about sort of what's happening with Russia or
441
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Iran or North Korea in terms of trying to use
442
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crypto to evade sanctions, that's probably the largest if you're
443
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thinking about percentages of overall illicit activity, sanctions.
444
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Evasion is the number one.
445
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But scams to me is like if I think about
446
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sort of all the real global threats, this proliferation of scams,
447
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I think pig butchering where you know, you get hit up.
448
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I'm sure this happens to you guys all the time.
449
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You get hit up on your your cell phone, Hey,
450
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how you doing? You don't want to play golf today.
451
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I mean, you got every version of this right. You're
452
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in my cell phone, but I didn't know your name.
453
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That's inevitably going to lead to a conversation, likely romantic,
454
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potentially back and forth. You'll be groomed over the course
455
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of potentially weeks, months or even longer, and eventually will
456
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result in a a investment opportunity. You know, Hey, I
457
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just bought a lambeau today. Oh, I just took my
458
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I just bought my mom a home. Oh how did
459
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you do that? Like it's like, hey, it's just like this,
460
00:24:38.440 --> 00:24:41.000
I'm doing this crypto thing. And they show you a
461
00:24:41.079 --> 00:24:44.440
genuine website. Maybe you send one hundred dollars first time.
462
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Maybe they send you a thousand back, and you said, wow,
463
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this is a you know, huge return on my investment
464
00:24:51.640 --> 00:24:53.799
in just a few days. So then you go ahead
465
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and send ten thousand and twenty thousand. Until you've lost
466
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your life savings and and you don't know where to
467
00:25:02.240 --> 00:25:04.640
go for help. Maybe you've lost your parents' life savings.
468
00:25:05.079 --> 00:25:08.599
We posted a video recently where we worked with law
469
00:25:08.640 --> 00:25:11.480
enforcement to recover some funds in a case where a
470
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young man committed suicide having lost everything to scammers and
471
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not knowing how to tell his family. To me, this
472
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is like the worst financial crime typology that I've seen
473
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sort of in my career, and I think in large
474
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part of like dedicated the rest of my career at
475
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least to trying to stop this.
476
00:25:31.359 --> 00:25:35.119
Yeah, and with the regulatory nature that's coming into crypto,
477
00:25:35.279 --> 00:25:39.039
you know, especially with US merging with traditional finance, I
478
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just think of traditional finance because of the compliant nature
479
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they are required by law to take these quizzes and
480
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always go through these tests of phishing emails and scant
481
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and to be on the lookout for this. So that
482
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do you think as that comes into crypto and you
483
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have more people in this ecosystem just kind of aware
484
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of what's out there and being you know, having to
485
00:25:59.680 --> 00:26:01.799
now go through these steps, do you think that that
486
00:26:01.880 --> 00:26:02.839
will help in any way?
487
00:26:03.160 --> 00:26:03.519
I do.
488
00:26:03.559 --> 00:26:04.920
I think it's a combination of things, Like there are
489
00:26:04.920 --> 00:26:07.480
a couple of different issues there, and it's a great question.
490
00:26:07.559 --> 00:26:09.759
I think that like, hey, we need a massive public
491
00:26:09.799 --> 00:26:13.880
awareness campaign, certainly in the US and globally, and those
492
00:26:13.880 --> 00:26:15.880
are things we're thinking a lot about. Is like how
493
00:26:15.920 --> 00:26:19.640
to support that. FBI has an amazing program called level
494
00:26:19.759 --> 00:26:22.359
Up where they literally go door to door, they get
495
00:26:22.400 --> 00:26:24.720
the data from TRM, they say, hey, we believe this
496
00:26:24.759 --> 00:26:26.680
person is going to be a victim or is a victim.
497
00:26:27.000 --> 00:26:29.200
They actually go knock on that person's door to try
498
00:26:29.200 --> 00:26:33.279
to intervene, and it's just shocking. People say like no, no,
499
00:26:33.200 --> 00:26:35.359
this is like I love this person. Get the wrong
500
00:26:35.400 --> 00:26:38.359
person right, and then you start to dig in if
501
00:26:38.359 --> 00:26:41.640
you ever actually met them, right, And.
502
00:26:42.240 --> 00:26:43.039
That doesn't scale.
503
00:26:43.519 --> 00:26:45.200
So we're thinking all the times, like how do we
504
00:26:45.279 --> 00:26:47.119
scale that, how do we make it bigger, how do
505
00:26:47.160 --> 00:26:50.359
we get to more victims? So I think it is
506
00:26:50.440 --> 00:26:54.839
it's it's public awareness is a huge piece, absolutely and
507
00:26:54.920 --> 00:26:56.680
something we're thinking a lot about. I think the other
508
00:26:56.759 --> 00:27:00.480
piece is how do we harden cybersecurity amongst crypto affirms,
509
00:27:01.039 --> 00:27:02.640
And you know, in the in the wake of the
510
00:27:02.720 --> 00:27:07.079
Drift protocol hack and the kelp Dow hack, there's all
511
00:27:07.160 --> 00:27:10.960
kinds of interesting questions about how do we harden cybersecurity,
512
00:27:11.680 --> 00:27:13.519
which I think is where where at least your question
513
00:27:13.599 --> 00:27:17.960
was getting to in part, And I think cybersecurity standards
514
00:27:18.000 --> 00:27:19.559
might be a little bit much, but I think definitely
515
00:27:19.640 --> 00:27:23.359
agreement on best, best in class or best practices for
516
00:27:23.440 --> 00:27:28.160
cybersecurity when it comes to certainly DeFi I think is
517
00:27:28.240 --> 00:27:31.039
really really important. The large exchanges, you know, do like
518
00:27:31.200 --> 00:27:33.039
I think, to your point, demand to operate like banks
519
00:27:33.039 --> 00:27:35.000
in many respects, and they have a lot of those
520
00:27:35.039 --> 00:27:39.640
things in place, right cyber they have compliance teams. But
521
00:27:39.680 --> 00:27:41.720
for these moral sort of DeFi protocols, I still think
522
00:27:41.720 --> 00:27:45.839
there's a lot we can do just utilizing the technology.
523
00:27:46.319 --> 00:27:48.359
I don't think we need to over regulate this space
524
00:27:48.400 --> 00:27:50.799
in order to stop bad actors. I think we just
525
00:27:50.839 --> 00:27:53.759
really need to lean into the technology. And you know,
526
00:27:53.799 --> 00:27:57.559
in part that is hardening cybersecurity. And then what I
527
00:27:57.559 --> 00:27:59.440
talk about a lot is like, you know, we like
528
00:27:59.480 --> 00:28:03.519
to blame the DeFi protocols, like oh they had like
529
00:28:03.680 --> 00:28:06.799
you know, lacks cyber controls, or this was a private
530
00:28:06.880 --> 00:28:10.119
key failure, like whatever, the whatever the excuses.
531
00:28:11.359 --> 00:28:12.640
I think we need to get better there.
532
00:28:13.079 --> 00:28:15.480
But my focus is always on, all right, let's go
533
00:28:15.519 --> 00:28:17.759
after the bad actors. So like, what are what are
534
00:28:17.799 --> 00:28:19.920
the national security capabilities that we have to go after
535
00:28:20.000 --> 00:28:23.359
North Korea? If North Korea is attacking Drift, why don't
536
00:28:23.359 --> 00:28:25.680
we attack North Korea and steal that money back. So
537
00:28:26.400 --> 00:28:27.920
that's a lot of what I talk about in terms
538
00:28:27.960 --> 00:28:30.160
of like we need to be more offensive as well
539
00:28:30.200 --> 00:28:32.680
as sort of defensive from like a hardening cyber perspective
540
00:28:32.680 --> 00:28:33.240
in this space.
541
00:28:33.640 --> 00:28:36.839
Have you heard about what Christopher Perkins and Chris John
542
00:28:36.880 --> 00:28:39.960
Carlo been talking about with letters of the Mark, so
543
00:28:40.240 --> 00:28:42.880
these privateers can go after sole in crypto.
544
00:28:43.240 --> 00:28:46.720
So we we've worked really closely with both Chris's who
545
00:28:46.720 --> 00:28:49.440
are really who are great friends also on letters of Mark.
546
00:28:49.960 --> 00:28:53.240
And I am a huge, huge proponent of letters of Mark,
547
00:28:53.240 --> 00:28:54.920
which is really what I was getting to just like
548
00:28:55.200 --> 00:28:58.400
for your audience. It's really cool in the US Constitution
549
00:28:58.559 --> 00:29:00.119
and I think sort of the most prevalent around the
550
00:29:00.160 --> 00:29:02.839
War of eighteen twelve, which is amazing to get to
551
00:29:02.839 --> 00:29:05.000
talk about like history like this when it comes to.
552
00:29:05.599 --> 00:29:06.640
Cyber and crypto.
553
00:29:07.559 --> 00:29:11.599
We were having a pirate problem, so essentially we provided
554
00:29:11.720 --> 00:29:16.119
or the US government, the president provided letters to privateers
555
00:29:16.480 --> 00:29:19.720
to go after pirates on the high seas in order
556
00:29:19.759 --> 00:29:22.640
to stop them from pillaging and plundering and all the
557
00:29:22.680 --> 00:29:27.960
things that Jack Sparrow does. I want cyber letters of Mark.
558
00:29:28.279 --> 00:29:30.480
I want to go after pirates on blockchains in the
559
00:29:30.559 --> 00:29:35.759
digital space using AI. And I think that we're living
560
00:29:35.799 --> 00:29:39.240
this like really interesting moment where the private sector has
561
00:29:39.279 --> 00:29:42.319
all of the data and the public sector has all
562
00:29:42.319 --> 00:29:45.119
of the authorities. And our job at TRM is to
563
00:29:45.119 --> 00:29:48.400
make sure that the public sector has the data that
564
00:29:48.480 --> 00:29:51.400
it needs. But I want some of those authorities because
565
00:29:51.400 --> 00:29:52.880
I think we could do a really good job in
566
00:29:52.920 --> 00:29:55.519
the private sector of being fast, of being nimble about
567
00:29:55.519 --> 00:29:59.240
going back and taking those funds. So, Dony, you nailed it, Like,
568
00:29:59.720 --> 00:30:02.400
you know, we want a letter of Mark to say, hey,
569
00:30:03.000 --> 00:30:05.759
go get those funds back from the Drift Protocol hack
570
00:30:05.839 --> 00:30:06.680
from North Korea.
571
00:30:07.640 --> 00:30:10.680
See what you go after? A scam?
572
00:30:11.480 --> 00:30:14.839
Uh, you know, transnational criminal network that's that's that's stealing
573
00:30:14.880 --> 00:30:18.240
money from Americans. So yeah, very very I'm so proud
574
00:30:18.279 --> 00:30:20.680
of the work that Chris Perkins and Christian Carlo have
575
00:30:20.759 --> 00:30:23.160
done in this space and always want to amplify it
576
00:30:23.200 --> 00:30:23.799
whenever I can.
577
00:30:24.200 --> 00:30:26.880
Yeah, we've interviewed both of them a few times, and
578
00:30:26.960 --> 00:30:29.599
of course that's always the topic because that's I think
579
00:30:29.640 --> 00:30:32.880
it makes sense and in the world we live and
580
00:30:33.039 --> 00:30:36.039
with how decentralized the Internet is and blockchains are, you got.
581
00:30:36.079 --> 00:30:37.440
I love that You've had those guys on like I'll
582
00:30:37.440 --> 00:30:39.720
bring this up and people think I'm crazy sometimes and
583
00:30:40.079 --> 00:30:42.039
I'm like, no, no, No, some really smart people agree with
584
00:30:42.079 --> 00:30:42.519
me on this.
585
00:30:44.319 --> 00:30:47.960
Yeah. When crypto, when crypto Dad agrees with you on something,
586
00:30:48.000 --> 00:30:48.960
you know you're living right.
587
00:30:49.119 --> 00:30:54.279
Yeah. It is really interesting how history always repeats itself
588
00:30:54.319 --> 00:30:57.119
in some way or another. I think Christopher Perkins made that,
589
00:30:58.640 --> 00:31:01.640
you know, he equated the parts and what we're going
590
00:31:01.680 --> 00:31:05.119
through today. I think it's great. Absolutely, what's on what's
591
00:31:05.119 --> 00:31:07.759
on the roadmap for a CRM, What's what's coming up
592
00:31:07.799 --> 00:31:09.839
that you have or you're excited to announce?
593
00:31:10.079 --> 00:31:11.599
No, I love it, Thank you for asking.
594
00:31:11.680 --> 00:31:13.400
I think there's a couple of really cool things happening
595
00:31:13.440 --> 00:31:14.880
if you have so, sort of like what's top of
596
00:31:14.920 --> 00:31:17.079
mind for me right now? I think I got into
597
00:31:17.079 --> 00:31:19.759
the AI piece a little bit. We have integrated AI
598
00:31:19.839 --> 00:31:24.519
into every every piece of our platform to now allow
599
00:31:24.559 --> 00:31:27.920
investigators to really take that rich on chain data set
600
00:31:28.400 --> 00:31:31.920
and combine it with off chain data to build holistic investigations.
601
00:31:31.920 --> 00:31:34.200
So when you're talking about like scams, for example, Hey,
602
00:31:34.240 --> 00:31:36.640
we can map out what a scam compound looks like
603
00:31:36.720 --> 00:31:39.079
or scam activity looks like on chain. You do that
604
00:31:39.119 --> 00:31:41.920
by connecting victims to certain wallets and you kind of
605
00:31:41.920 --> 00:31:44.440
can see like it's you know, a spider web of
606
00:31:44.960 --> 00:31:47.640
a network there. What I'm excited to do is say, hey,
607
00:31:47.720 --> 00:31:51.000
let's let's learn everything we can about who's running these organizations,
608
00:31:51.279 --> 00:31:54.640
what's the what's the financial structure, and take all that
609
00:31:54.720 --> 00:31:57.000
kind of rich off chain data and combining those things.
610
00:31:57.039 --> 00:31:59.559
So I'd say that that AI and how to integrate
611
00:31:59.559 --> 00:32:02.519
it into the these types of investigations is like the
612
00:32:02.559 --> 00:32:08.279
most top of mind thing. Equally exciting is this idea
613
00:32:08.319 --> 00:32:12.359
of like public private disruption. We talk a lot about
614
00:32:12.359 --> 00:32:16.960
public private partnerships. I hate that phrase. It's like the
615
00:32:17.000 --> 00:32:19.519
recommendation that everyone makes when they don't have a real
616
00:32:19.559 --> 00:32:22.759
recommendation to make. Hey, we just need to get together
617
00:32:22.839 --> 00:32:25.640
and talk and sit around a table. I believe the
618
00:32:25.640 --> 00:32:28.279
public sector and private sector have to work really closely together,
619
00:32:28.759 --> 00:32:31.720
but it has to be in real time and it
620
00:32:31.759 --> 00:32:35.400
has to result in interdiction, meaning stopping funds from moving
621
00:32:35.920 --> 00:32:38.880
and seizing them back for the good guys. So we
622
00:32:38.960 --> 00:32:42.640
built About a year ago August, we announced something called
623
00:32:42.680 --> 00:32:48.519
the Beacon network. It's the largest information sharing network within crypto.
624
00:32:49.440 --> 00:32:51.279
What we did is really cool, Like we saw a
625
00:32:51.319 --> 00:32:55.240
huge problem that actors were moving faster than compliance teams
626
00:32:55.240 --> 00:32:58.880
could keep up. By bit had happened about six months prior.
627
00:32:59.480 --> 00:33:02.559
We saw you know, we saw a billion and a
628
00:33:02.599 --> 00:33:06.960
half dollars laundered from ethereum to bitcoin in like seventy
629
00:33:06.960 --> 00:33:09.559
two hours, and we said, hey, how do we keep
630
00:33:09.640 --> 00:33:12.519
up with this pace? So we reached out to coinbase
631
00:33:12.640 --> 00:33:17.640
and binance, to largest or arguably most important exchanges in
632
00:33:17.720 --> 00:33:20.799
the space. If anyone knows Coinbase and finance, they don't
633
00:33:20.799 --> 00:33:23.039
do much together, so this was like really cool to
634
00:33:23.039 --> 00:33:26.880
get them on board together. We then onboarded folks like
635
00:33:26.920 --> 00:33:33.079
Kraken and Okx, Crypto dot com, blockchain dot com. We
636
00:33:33.440 --> 00:33:40.359
added FinTechs like Stripe and Robinhood and PayPal, Ripple. Beacon
637
00:33:40.359 --> 00:33:44.359
today accounts for about eighty five percent of centralized cryptocurrency transaction,
638
00:33:44.480 --> 00:33:47.960
so it's this extraordinary group. We then married that group
639
00:33:48.200 --> 00:33:52.240
of private sector companies with about one hundred global law
640
00:33:52.279 --> 00:33:56.920
enforcement agencies. I think every three letter law enforcement agency
641
00:33:56.960 --> 00:34:00.640
in the US today, and the law enforcement agents are flaggers.
642
00:34:01.000 --> 00:34:03.759
They will flag illicit crypto proceeds as they're moving in
643
00:34:03.799 --> 00:34:06.599
real time. Say there's a North Korea hack, there's ransomware,
644
00:34:06.640 --> 00:34:10.599
there's a scam, and they send out an alert. Think Beacon, lighthouse,
645
00:34:10.679 --> 00:34:13.960
right to the network and ultimately to be a member
646
00:34:13.960 --> 00:34:16.119
of Beacon. It's non commercial for us, so we have
647
00:34:16.159 --> 00:34:19.000
TRM customers, we have non TRM customers. The only thing
648
00:34:19.039 --> 00:34:20.800
you have to agree to is if you're in exchange
649
00:34:20.840 --> 00:34:22.800
and you want to be in that, you actually have
650
00:34:22.880 --> 00:34:25.239
to act on an alert, which means you have to
651
00:34:25.280 --> 00:34:29.679
freeze and then work with law enforcement to seize those funds.
652
00:34:29.880 --> 00:34:32.000
And if you're a flagger, you have to agree to
653
00:34:32.079 --> 00:34:34.679
follow up on your flag. So I say all of
654
00:34:34.719 --> 00:34:37.119
that to say that, like, I think this combination of
655
00:34:37.199 --> 00:34:42.599
AI and real real information sharing for disruption in addiction
656
00:34:42.760 --> 00:34:47.719
seizure combined is actually how we stop bad actors. We
657
00:34:47.840 --> 00:34:51.480
keep funds on chain, right, So like those exchanges basically
658
00:34:51.480 --> 00:34:55.480
create a perimeter so funds cannot move off the blockchain
659
00:34:55.920 --> 00:34:59.000
or blockchains, and then we ultimately work to seize them back,
660
00:35:00.039 --> 00:35:02.360
making it much more difficult for bad actors. So I'll
661
00:35:02.400 --> 00:35:04.400
kind of stop there, but I'd say that like top
662
00:35:04.440 --> 00:35:08.639
of mind AI definitely information sharing at scale and just
663
00:35:08.719 --> 00:35:11.639
really crushing it with you know who you could bring
664
00:35:11.639 --> 00:35:12.400
together in the space.
665
00:35:12.519 --> 00:35:14.719
Yeah, I mean it makes sense. The real time data
666
00:35:14.800 --> 00:35:18.679
obviously that you work on is so important. Does the
667
00:35:18.880 --> 00:35:21.559
do the prediction markets have any is there? I know
668
00:35:21.639 --> 00:35:24.239
you can't really work off of a maybe, but there
669
00:35:24.519 --> 00:35:26.440
is there any way that you could forecast where the
670
00:35:26.480 --> 00:35:29.199
bad actors might go based on prediction markets or that's
671
00:35:29.239 --> 00:35:30.679
not a part of your business model.
672
00:35:30.800 --> 00:35:31.159
I love it.
673
00:35:31.159 --> 00:35:32.800
That's so interesting. You know, we put out a piece
674
00:35:32.960 --> 00:35:35.679
just a few months ago on sort of prediction market
675
00:35:35.719 --> 00:35:38.000
more from a volume perspective, but also from sort of
676
00:35:38.039 --> 00:35:40.559
the instrider trading perspective and how all that works. I
677
00:35:40.559 --> 00:35:44.079
think it's a fascinating space. It's interesting. I mean, you
678
00:35:44.159 --> 00:35:46.920
look at a poly market where there's most or many
679
00:35:46.960 --> 00:35:48.719
of their transactions are on chain, so we have a
680
00:35:48.760 --> 00:35:52.280
lot more visibility on those flows than say a call sheet,
681
00:35:52.280 --> 00:35:56.079
which doesn't operate on chain. So I think it's sort
682
00:35:56.079 --> 00:35:59.880
of a real open question. What we would be looking for, obviously,
683
00:36:00.119 --> 00:36:02.880
is if bad actors are using these types of platforms
684
00:36:02.920 --> 00:36:06.320
to launder illicit proceeds. Right, are you taking proceeds from
685
00:36:06.360 --> 00:36:08.480
a hack and moving them to a wallet that we
686
00:36:08.559 --> 00:36:11.559
know is associated with polymarket and that's that's the type
687
00:36:11.559 --> 00:36:14.360
of activity. But I think it's a wonderful question because
688
00:36:14.400 --> 00:36:17.960
like it speaks to this on chain economy that is
689
00:36:18.119 --> 00:36:21.920
that is taking shape, and prediction marketers are a piece
690
00:36:21.920 --> 00:36:24.159
of this. Crypto is a piece of its stable coins,
691
00:36:24.199 --> 00:36:27.079
and how financial institutions engage there as a part of it.
692
00:36:28.280 --> 00:36:31.599
Bitcoin'll obviously always play a part in this. So I
693
00:36:31.599 --> 00:36:33.320
think it's it's it's going to be very interesting to
694
00:36:33.320 --> 00:36:35.159
see kind of how all of that plays out. But
695
00:36:35.199 --> 00:36:37.960
it's fun to see, you know, fintech kind of building
696
00:36:37.960 --> 00:36:42.000
that bridge between you know, crypto and and and FIAT
697
00:36:42.079 --> 00:36:44.239
and and and all that we're seeing there.
698
00:36:44.280 --> 00:36:46.440
With the data mining that you're doing, all this data
699
00:36:46.440 --> 00:36:50.639
you're collecting on the blockchain. Obviously it's to prevent and
700
00:36:50.639 --> 00:36:52.920
stop a lot of bad actors and prevent hacks and
701
00:36:52.960 --> 00:36:55.079
things like that, but there's also a lot of good data.
702
00:36:55.119 --> 00:36:58.679
There are the companies you're working with looking or taking
703
00:36:58.719 --> 00:37:00.679
that data and looking at how they can better serve
704
00:37:00.719 --> 00:37:03.599
the customers based on their habits, again to everyday user,
705
00:37:03.880 --> 00:37:04.679
not the bad actors.
706
00:37:04.840 --> 00:37:06.880
Yeah, no, no, of course, it's a great question. So really,
707
00:37:06.880 --> 00:37:09.519
what we're doing is we're mapping blockchains, and we're mapping
708
00:37:09.559 --> 00:37:13.599
them primarily for illicit activity today, right, we want to know, hey,
709
00:37:13.639 --> 00:37:15.519
is that an address we know is associated with a
710
00:37:15.599 --> 00:37:21.480
terrorist financer or a ransomware group. And the way we
711
00:37:21.519 --> 00:37:23.480
do this, I mean it's really cool stuff. I mean,
712
00:37:23.480 --> 00:37:25.480
we have a team of threat hunters. We have someone
713
00:37:25.519 --> 00:37:28.239
who focuses full time on ransomware, someone who focuses full
714
00:37:28.239 --> 00:37:31.840
time on terror financing. Our terror financing expert is communicating
715
00:37:31.880 --> 00:37:36.719
with ISIS fighters on password protected Telegram channels and rocket
716
00:37:36.760 --> 00:37:40.760
chat in order to get that illicit crypto address because
717
00:37:40.760 --> 00:37:43.000
they send it to him, say hey, send funds to
718
00:37:43.079 --> 00:37:46.199
this address. We label it in our tool terror financing.
719
00:37:46.559 --> 00:37:48.480
We then use AI to build out a larger and
720
00:37:48.559 --> 00:37:50.880
larger database. We don't want to know just that one address,
721
00:37:51.199 --> 00:37:53.039
We want to know anyone who sent funds to it,
722
00:37:53.079 --> 00:37:55.079
who's received funds through it, and were then able to
723
00:37:55.159 --> 00:37:57.960
label those. So what we're doing is we're mapping out
724
00:37:58.280 --> 00:38:04.320
illicit activity on blockchains, using really just the most amazing
725
00:38:04.360 --> 00:38:08.480
team of threadhunters in the world, many former law enforcement,
726
00:38:09.039 --> 00:38:12.280
but then using technology to really scale it. So I
727
00:38:12.320 --> 00:38:14.599
think that's that's definitely something that we're taking that that's
728
00:38:14.639 --> 00:38:17.039
our primary business, and then sort of using that data
729
00:38:17.400 --> 00:38:20.199
on and off chain. Your question is a great one,
730
00:38:20.519 --> 00:38:24.719
and that is blockchain data rich. There's so many interesting
731
00:38:24.719 --> 00:38:26.679
things that you can get from blockchain data, right, like
732
00:38:26.800 --> 00:38:30.840
you know, are there are there patterns, consumer behavioral patterns,
733
00:38:30.880 --> 00:38:33.679
even the consumer. We're in the consumer protection lane and
734
00:38:33.679 --> 00:38:35.760
we're definitely looking at a lot of that. But the
735
00:38:35.800 --> 00:38:40.360
primary business today is investigations on and off chain AI powered.
736
00:38:41.000 --> 00:38:44.320
Well, you've mentioned sanctions a lot in this interview, and
737
00:38:44.400 --> 00:38:48.400
unfortunately I see Elizabeth Warren's face every time you say sanctions.
738
00:38:48.400 --> 00:38:50.480
That's just an association now I have. But I want
739
00:38:50.519 --> 00:38:53.559
to move to the Clarity Act moving in the Senate.
740
00:38:53.840 --> 00:38:55.559
What do you think is going to happen here? Do
741
00:38:55.599 --> 00:38:58.000
you have an opinion on it? I know you're positive.
742
00:38:59.280 --> 00:39:00.000
What are your thoughts?
743
00:39:00.199 --> 00:39:02.800
Yeah? The what order should I take those questions in?
744
00:39:03.000 --> 00:39:05.519
Let's go with so A.
745
00:39:05.880 --> 00:39:09.559
I'm very positive and you've probably seen me out there
746
00:39:09.559 --> 00:39:13.480
a bit talking publicly about why I think that Clarity
747
00:39:13.519 --> 00:39:17.400
is good for law enforcement, for US national security, you know.
748
00:39:17.559 --> 00:39:20.239
And it's not an industry perspective, to be honest with you.
749
00:39:20.360 --> 00:39:22.559
I were not a member of any trade associations. I
750
00:39:22.559 --> 00:39:24.679
don't speak with any I don't speak for the industry
751
00:39:24.679 --> 00:39:28.199
by any means. But in the conversations that I've had
752
00:39:28.239 --> 00:39:31.440
over my six years, A tirm with investigators from the FBI,
753
00:39:31.559 --> 00:39:35.280
from HSI, from IRSCI, from DEA Secret Service. They are
754
00:39:35.400 --> 00:39:37.800
using TRM to track and trace the listit activity that
755
00:39:37.840 --> 00:39:43.239
we never would be able to see in traditional cases,
756
00:39:43.280 --> 00:39:46.760
you know, involving networks of shell companies and bul cash smuggling.
757
00:39:46.760 --> 00:39:48.400
You just can't see it. So I think there's that piece.
758
00:39:48.880 --> 00:39:51.119
The other piece Clarity does really for the first time ever,
759
00:39:51.159 --> 00:39:54.280
and you alluded to this earlier, Amanda, is it brings
760
00:39:54.880 --> 00:39:58.880
crypto firms within the Bank Secrecy Act framework, essentially giving
761
00:39:58.880 --> 00:40:03.000
them exactly the same compliance obligations that financial institutions have,
762
00:40:03.119 --> 00:40:08.119
and that is absolutely critical. But then there's eighteen other provisions.
763
00:40:09.079 --> 00:40:11.039
We wrote a post that I would encourage folks to
764
00:40:11.079 --> 00:40:14.760
read that literally go provision by provision, laying out the
765
00:40:14.800 --> 00:40:17.599
twenty or so that are pro law enforcement or supportive
766
00:40:17.639 --> 00:40:21.119
of law enforcement within the Clarity Act. Two favorites for
767
00:40:21.159 --> 00:40:24.320
me really stand out. There's one that describes the beacon network.
768
00:40:24.360 --> 00:40:26.800
In large part it's how we can really use real
769
00:40:26.840 --> 00:40:31.320
time data to share information and how the Secretary of
770
00:40:31.360 --> 00:40:34.719
the Treasury and the Attorney General could certify existing networks
771
00:40:34.719 --> 00:40:36.719
in order to do that sort of a realization that
772
00:40:36.760 --> 00:40:39.480
we can actually share information better in crypto than we
773
00:40:39.519 --> 00:40:41.880
can in this traditional world. And then the other is
774
00:40:41.920 --> 00:40:45.000
a hold law. And the way a hold law works
775
00:40:45.079 --> 00:40:47.880
is that today banks have limited liability if they hold
776
00:40:47.960 --> 00:40:54.360
customer funds based on law enforcement process search warrant. Cryptocurrency
777
00:40:54.360 --> 00:40:57.440
firms don't have that protection today. So in order to
778
00:40:57.559 --> 00:41:01.239
ensure that firms are able to freeze and wait for
779
00:41:01.320 --> 00:41:05.440
law enforcement process, there is a whole law that allows
780
00:41:05.519 --> 00:41:08.719
businesses thirty days up to one hundred and fifty days
781
00:41:09.599 --> 00:41:13.719
limited liability in order to hold customer funds pending you know,
782
00:41:13.800 --> 00:41:18.760
law enforcement investigation, subpoena, search warrant. That's critical, It's absolutely critical.
783
00:41:19.679 --> 00:41:21.480
And we can get into all kinds of other provisions
784
00:41:21.480 --> 00:41:25.599
in there on DeFi and the BRCA. But I think
785
00:41:25.599 --> 00:41:29.679
that obviously very very positive. Your second question is actually
786
00:41:29.760 --> 00:41:32.079
much harder for me, and that is like, you know,
787
00:41:32.400 --> 00:41:36.960
the prognosticator part, and I think it's hard. I think
788
00:41:36.960 --> 00:41:40.079
this is going to be really hard. To be clear,
789
00:41:40.119 --> 00:41:43.599
I'm a prosecutor. I've had some fun policy conversations on
790
00:41:43.599 --> 00:41:45.400
the Hill the last few years, which is like an
791
00:41:45.400 --> 00:41:47.639
incredible honor and like very humbling because it's not my
792
00:41:47.719 --> 00:41:50.480
world at all I've testified, I don't know four or
793
00:41:50.480 --> 00:41:55.400
five times up there, always nervous every time, and I
794
00:41:55.440 --> 00:41:57.400
would say just always trying to find like provide that
795
00:41:57.440 --> 00:42:01.320
expertise and like law enforcement perspective. I think the time
796
00:42:01.679 --> 00:42:04.599
is ticking. I think we're having the midterms come up
797
00:42:04.639 --> 00:42:07.119
in November. Congress is going to be out for a
798
00:42:07.119 --> 00:42:11.320
significant amount of time between now and then, like almost
799
00:42:11.400 --> 00:42:13.960
all of it, other than a few weeks here and there.
800
00:42:14.400 --> 00:42:17.159
So I think the timeline and a couple really outstanding
801
00:42:17.199 --> 00:42:23.039
issues are are going to be very, very difficult to overcome. Ironically,
802
00:42:23.760 --> 00:42:26.079
I feel very good about this issue right from a
803
00:42:26.119 --> 00:42:28.440
pro law enforcement perspective. I think a lot of groups
804
00:42:28.440 --> 00:42:30.480
have come out lately. A couple groups have come out lately.
805
00:42:30.679 --> 00:42:33.880
Some are still skeptical, but I think that ultimately they
806
00:42:33.960 --> 00:42:37.280
understand that this is better. You know, what's in there
807
00:42:37.320 --> 00:42:40.199
today is better than nothing at all. But then I
808
00:42:40.199 --> 00:42:43.079
think you start talking about ethics and stuff that, quite frankly,
809
00:42:43.119 --> 00:42:45.119
is stuff I spend less time thinking about because I
810
00:42:45.199 --> 00:42:48.079
just don't have the headspace of the bandwidth that I
811
00:42:48.119 --> 00:42:49.760
think is going to make it really hard for Democrats
812
00:42:49.800 --> 00:42:54.079
to ultimately vote for I will stop there. Other than
813
00:42:54.079 --> 00:42:57.559
to say this clarity will pass like we will one
814
00:42:57.639 --> 00:43:00.719
hundred percent have a crypto market structure bill. It may
815
00:43:00.760 --> 00:43:03.960
look a lot different than this bill looks like today,
816
00:43:04.880 --> 00:43:07.719
based on whose controls Congress next, what happens in the
817
00:43:07.760 --> 00:43:11.320
White House in two years. Like, we're going to get something,
818
00:43:11.360 --> 00:43:14.280
whether it's now or whether it's later, We're going to
819
00:43:14.320 --> 00:43:18.320
get something. And quite frankly, like I'm a pretty patient
820
00:43:18.320 --> 00:43:21.679
guy and kind of excited to work with whoever is
821
00:43:21.679 --> 00:43:23.960
willing to work on this with us. I think that
822
00:43:24.039 --> 00:43:25.360
right now we're in a very good space with the
823
00:43:25.360 --> 00:43:28.199
regulatory agencies, the SEC, the CFTC, and I think that'll
824
00:43:28.199 --> 00:43:30.119
be very strong for the next couple of years. I
825
00:43:30.119 --> 00:43:31.599
will kind of see how all that plays out. So
826
00:43:32.440 --> 00:43:33.880
I don't know, you just got me to do something
827
00:43:33.920 --> 00:43:37.039
I tell my kids never to do play what ifs
828
00:43:37.119 --> 00:43:39.719
or guessing games or this kind of thing. But I
829
00:43:39.719 --> 00:43:41.800
don't know. It's been It's been a fun conversation. So
830
00:43:41.840 --> 00:43:42.639
I think you just got me.
831
00:43:43.800 --> 00:43:44.719
I'm right perfect.
832
00:43:45.480 --> 00:43:48.920
I had a quick question about tokenization of assets. You
833
00:43:49.000 --> 00:43:52.039
have this transition happening with traditional assets going on chain.
834
00:43:53.480 --> 00:43:55.679
How are you and the folks at Tierram Lambs preparing
835
00:43:55.679 --> 00:43:57.639
for that, because you're going to have more transactions to
836
00:43:57.679 --> 00:44:01.239
the handle and process, but also more assets avenues where
837
00:44:01.239 --> 00:44:03.239
bad actors can say, I'm going to take a tokenized
838
00:44:03.280 --> 00:44:06.039
version of Tesla stock and go try to scam some here.
839
00:44:06.159 --> 00:44:07.079
Yeah. I think it's awesome.
840
00:44:07.119 --> 00:44:09.159
I mean, like, that's that's the beauty of this, right,
841
00:44:09.280 --> 00:44:12.679
anything that's put on a blockchain, certainly a public blockchain
842
00:44:12.760 --> 00:44:14.800
or any blockchain that we're running nodes on, we have
843
00:44:15.119 --> 00:44:18.920
visibility on those transactions, so we can track and trace
844
00:44:19.000 --> 00:44:23.079
that Tesla stock if it is tokenized and put on chain.
845
00:44:23.559 --> 00:44:25.599
I will say that, like, again, as bullish as I
846
00:44:25.599 --> 00:44:28.320
am on the space, I mean, the only thing and
847
00:44:28.679 --> 00:44:30.679
your viewers may push back on this, but the only
848
00:44:30.679 --> 00:44:33.199
thing that I've seen successfully tokenized in my time over
849
00:44:33.239 --> 00:44:36.000
the last few years in this space is the US dollar.
850
00:44:37.920 --> 00:44:40.440
But I will say that that has been tremendous boon
851
00:44:40.719 --> 00:44:44.480
for compliance. We're now able to track and trace US
852
00:44:44.599 --> 00:44:51.039
dollars on chain right USDC, usd t H, and can
853
00:44:51.119 --> 00:44:54.480
build investigations and and go after bad guys in ways
854
00:44:54.519 --> 00:44:57.239
we never could before. And I think that that as
855
00:44:57.239 --> 00:45:00.840
the tokenized economy grows, will own just be better.
856
00:45:01.239 --> 00:45:02.320
You know, at that essentially.
857
00:45:02.360 --> 00:45:04.360
I mean, stable coins is a huge piece of the
858
00:45:04.360 --> 00:45:09.199
cryptoeconomy today, and there are some really unique properties of
859
00:45:09.239 --> 00:45:11.480
stable coins, and I don't know if we need to
860
00:45:11.480 --> 00:45:13.679
get into all of those, but stable coins are really
861
00:45:13.719 --> 00:45:18.039
unique and that the issuer can essentially what they call burn,
862
00:45:18.159 --> 00:45:21.480
which is essentially removed from your wallet, put in another wallet,
863
00:45:21.960 --> 00:45:26.199
and reissue to a victim to law enforcement based on
864
00:45:26.400 --> 00:45:30.320
legal process. So you know, there's all kinds of properties
865
00:45:30.320 --> 00:45:32.960
that we can now build in in this world. And
866
00:45:33.000 --> 00:45:34.719
I know some of your listeners will think, Wow, that's
867
00:45:34.760 --> 00:45:38.159
an amazing compliance capability, and some will be like, oh
868
00:45:38.199 --> 00:45:40.440
my god, that is the worst thing to happen to privacy.
869
00:45:41.119 --> 00:45:43.280
And that's why I think, as someone who really believes
870
00:45:43.280 --> 00:45:45.960
in the importance of privacy in our space, I think
871
00:45:45.960 --> 00:45:48.000
it's I think we need to make sure that we are,
872
00:45:48.559 --> 00:45:53.719
you know, really being very careful about ensuring security, but
873
00:45:53.840 --> 00:45:57.280
also ensuring that lawful actors are able to transact in
874
00:45:57.320 --> 00:45:59.280
a secure and private way.
875
00:45:59.480 --> 00:46:01.880
As such. A great point on the burn feature that
876
00:46:02.000 --> 00:46:06.280
if someone whatever bad actor takes over some level of
877
00:46:06.280 --> 00:46:08.840
stable coin or an asset and you have the issue,
878
00:46:08.920 --> 00:46:12.559
they can burn that based on the hash the respective
879
00:46:12.599 --> 00:46:13.880
wallet addresses and.
880
00:46:14.079 --> 00:46:16.000
Anywhere in the wild, anywhere in the wild.
881
00:46:16.079 --> 00:46:18.480
And you know, like we we have a very cool
882
00:46:18.920 --> 00:46:21.840
initiative called t three where we've partnered with Tron and
883
00:46:21.880 --> 00:46:27.000
Tether to investigate cases of ill listed activity only on
884
00:46:27.000 --> 00:46:31.480
only in USDT on Tron, we've seized back hundreds of
885
00:46:31.519 --> 00:46:33.960
millions by last count, about four hundred and fifty million,
886
00:46:34.280 --> 00:46:37.960
I think is higher than that today over the couple
887
00:46:37.960 --> 00:46:40.519
of years that this has been operational, And that's just
888
00:46:40.599 --> 00:46:45.719
because of those native qualities of of you know, tokenized
889
00:46:45.920 --> 00:46:48.760
US dollars from Tether, from Circle, from other types of
890
00:46:48.760 --> 00:46:53.239
issuers like this, so super powerful compliance tool aery.
891
00:46:53.320 --> 00:46:55.280
I want to just wrap up with a couple questions
892
00:46:55.280 --> 00:46:57.800
for audience that kind of we get to know you
893
00:46:57.880 --> 00:47:02.079
outside of crypto so quick early bird or night owl?
894
00:47:02.480 --> 00:47:02.760
Wow?
895
00:47:03.000 --> 00:47:04.760
You know I might be both, and I'm not one
896
00:47:04.840 --> 00:47:08.320
hundred percent sure. Like I travel a lot, and when
897
00:47:08.360 --> 00:47:10.199
I travel, I don't sleep that much, so people always like,
898
00:47:10.239 --> 00:47:12.079
how are you out? And then you know, I do
899
00:47:12.119 --> 00:47:14.079
these TRM run clubs where I get everyone out at
900
00:47:14.079 --> 00:47:14.960
like six o'clock.
901
00:47:14.679 --> 00:47:16.239
In the morning to go running with me all over
902
00:47:16.280 --> 00:47:16.679
the world.
903
00:47:17.039 --> 00:47:19.239
So if you guys are ever traveling to a crypto conference,
904
00:47:19.440 --> 00:47:20.800
try to find the TRM run club.
905
00:47:20.800 --> 00:47:22.320
But so I think I might be both.
906
00:47:23.440 --> 00:47:26.400
Okay, windows seat or aisle when you travel.
907
00:47:26.280 --> 00:47:27.880
I'm an aisle guy. I'm an aisle guy.
908
00:47:28.239 --> 00:47:29.679
You don't get hit with the cart that comes down
909
00:47:29.719 --> 00:47:30.000
the middle.
910
00:47:30.000 --> 00:47:31.760
Oh I always get hit by the You always get there?
911
00:47:31.800 --> 00:47:34.920
Oh yeah yeah? Text email or call.
912
00:47:35.639 --> 00:47:36.559
I love to text.
913
00:47:37.159 --> 00:47:40.800
Text. What is one company outside of crypto that you admire?
914
00:47:41.519 --> 00:47:41.719
You know?
915
00:47:41.719 --> 00:47:46.159
It's interesting. I that's such a great question. They're a
916
00:47:46.159 --> 00:47:49.119
whole bunch, you know. I think you know, people ask
917
00:47:49.159 --> 00:47:51.639
me like, why'd you do that crazy thing joining TRM
918
00:47:51.679 --> 00:47:53.920
when we were seven people, when no one knew who
919
00:47:53.920 --> 00:47:56.559
we were. And for me, it was really the mission.
920
00:47:57.800 --> 00:48:00.119
How do we stop bad actors from engaging with this new,
921
00:48:01.000 --> 00:48:04.039
really special financial institution that we're building together. So I
922
00:48:04.039 --> 00:48:05.719
think I look around the world and I'm like, all right,
923
00:48:05.760 --> 00:48:09.719
what are like mission companies out there? Like you know,
924
00:48:09.760 --> 00:48:12.079
I love Patagonia, right, Like, I mean, this is this
925
00:48:12.119 --> 00:48:13.559
is a company that's thought about like how do we
926
00:48:13.639 --> 00:48:15.920
use recycle materials? How do we like make the world
927
00:48:15.960 --> 00:48:20.159
better by how do we how do we I don't
928
00:48:20.199 --> 00:48:22.639
know what's what's the term. How do we do well
929
00:48:22.679 --> 00:48:25.119
by doing good. That's how I think about TRM, and
930
00:48:25.159 --> 00:48:27.400
that's I love companies that that have kind of lived
931
00:48:27.400 --> 00:48:28.440
that ethos.
932
00:48:28.800 --> 00:48:31.880
I love that if you could have dinner with any
933
00:48:31.920 --> 00:48:33.480
person living or dead, who is it?
934
00:48:33.960 --> 00:48:36.719
Oh? Anyone who knows me knows that I'm obsessed with
935
00:48:36.760 --> 00:48:41.440
Alexander Hamilton. He was the first Treasury Secretary. As you know,
936
00:48:41.519 --> 00:48:43.760
I worked for a couple of years the US Treasury Department.
937
00:48:44.360 --> 00:48:49.480
I'm obsessed with the musical, you know. I uh, I'm
938
00:48:49.480 --> 00:48:52.440
never thrown away my shot, always being young, scrappy and hungry.
939
00:48:52.920 --> 00:48:56.079
So I would love to sit down with Alexander Hamilton.
940
00:48:56.199 --> 00:48:58.800
If Linn Manuel Miranda was willing to meet us for dinner,
941
00:48:59.400 --> 00:49:01.639
then like, that would be just best night ever.
942
00:49:01.719 --> 00:49:02.679
I'm paying for that meal.
943
00:49:04.719 --> 00:49:06.320
Best advice you've ever gotten?
944
00:49:07.119 --> 00:49:11.679
Wow, Oh my gosh, I love that. The best advice
945
00:49:11.719 --> 00:49:14.000
I've ever gotten is lead with value. I think a
946
00:49:14.000 --> 00:49:16.320
lot of us are always like asking for stuff like hey,
947
00:49:16.360 --> 00:49:18.199
how can you help me with this? Or how can
948
00:49:19.079 --> 00:49:20.960
you know? What can you do for me? And I
949
00:49:20.960 --> 00:49:23.159
think what I've learned over the years, especially at TRM,
950
00:49:23.320 --> 00:49:25.800
is like how should we approach every moment and be like,
951
00:49:25.840 --> 00:49:28.639
what is the value that I could provide you, And
952
00:49:28.679 --> 00:49:30.519
for us, it's like, how do we solve the problem
953
00:49:30.559 --> 00:49:32.159
that you face? And a lot of that problem is
954
00:49:32.199 --> 00:49:37.480
like really bad, really bad activity, really really bad actors.
955
00:49:37.800 --> 00:49:39.599
And even when I was a prosecutor, you know, I
956
00:49:39.920 --> 00:49:44.039
cut my teeth doing domestic violence misdemeanor cases and child abuse,
957
00:49:44.800 --> 00:49:47.320
and I think, my, my, you know what I learned
958
00:49:47.320 --> 00:49:49.679
there is that like you get so much from giving
959
00:49:49.760 --> 00:49:51.880
of yourself. So I think it's it's lead with value,
960
00:49:51.960 --> 00:49:53.440
like what are the things you can do to help
961
00:49:53.480 --> 00:49:54.760
most as you build your career.
962
00:49:55.360 --> 00:49:58.320
Well you certainly take that advice to heart. So Avery Redboard,
963
00:49:58.320 --> 00:49:59.960
thank you so much for joining us, and thank you
964
00:50:00.079 --> 00:50:01.559
for all the work you're doing in this industry.
965
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Amanda, thank you so much. Tony. It was awesome. You
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guys are great. I really appreciate you having me on.
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Thank you so much for tuning in. Please hit the
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like button subscribe if you haven't as yet. If you're
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listening on a podcast platform such as Spotify or Apple,
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please follow and leave a five star rating. Thank you
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so much,