In this episode of Stolen, a Podcast with Erin West, Erin chats with Ari Redbord, the global head of policy for TRM Labs, about the role of TRM Labs in helping combat transnational organized crime through blockchain intelligence. They discuss topics such as cryptocurrency tracing, financial crime prevention, and victim recovery. The conversation delves into specific tools and technologies TRM Labs uses to assist law enforcement, including their Tracers program, and the significance of TRM's training initiatives for state and local law enforcement. They also explore the phenomenon of 'pig butchering' scams, the paradox of cryptocurrency's utility for both lawful and illicit activities, and the recent FinCEN action against Huione, a significant player in the Crypto money laundering world. The episode wraps up with insights into the collaborative community and the importance of innovative approaches in tackling international financial crimes.
00:00 Introduction and Guest Introduction
01:20 ChatGPT's Insight on Ari Redbord
02:32 Ari's Career Journey and TRM Labs
04:10 TRM Labs and Its Mission
08:58 Understanding Blockchain and Cryptocurrency
12:13 Law Enforcement and Cryptocurrency
17:46 Challenges and Cooperation in Crypto Investigations
24:45 Sanctions and Tools Against Transnational Crime
27:35 Understanding the Patriot Act's Section 311
28:43 US Government's Actions Against Transnational Scammers
30:04 TRM Labs' Role in Supporting Law Enforcement
32:09 Operation Shamrock and Chain Abuse Portal
36:37 Insights from the IC3 Report on Crypto Crimes
42:03 The TRM Running Club: Building Community Through Running
46:17 Innovative Approaches to Combatting Transnational Crime
50:40 TRM Bootcamps: Training Law Enforcement
52:46 Concluding Thoughts and Future Directions
I giant thank you to our first sponsor: TRM Labs
TRM Labs - Blockchain Investigations & Risk Management -Investigate, monitor, and detect crypto and digital asset fraud and financial crime
stolenapodcast@gmail.com
Operation Shamrock
#stolenapodcastwitherinwest #erinwest #operationshamrock #pigbutchering #cybercrime #organizedcrime #transnationalorganizedcrime #stolenpodcast #stolenapodcast #scams #fraud #TRM #TRMLabs #huione #FinCen #crytpocurrency #blockchain #trmrunningclub #ariredbord
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(01:00):
Hi friends.
Today we are here withone of my good friends.
We are here with Ari Redbord, who isthe global head of policy for TRM Labs.
They're the sponsor of today's episodeand have been very good friends
to me personally and to state andlocal law enforcement generally.
So I'm delighted to have Ari aboard today.
And I have to tell you that beforewe started the podcast just a few
(01:23):
minutes ago, I was like, let'ssee what chat GPT says about this.
So I asked chat, GPT,do you know Ari Redbord?
And it did, it told me thatyou're a well-known expert.
And then knowing what it knowsabout me, I said, what questions
would you ask him on a podcastabout transnational organized crime?
And here's what it.
Interview Ari Redbord on a podcastabout transnational organized
(01:45):
crime, especially with yourfocus on scams and pig butchering
would be a gold mine of insight.
So let's unpack this gold mine.
Let's get some or carts moving it out.
Rie, thank you for being here today.
Erin, I'm so happy to be here.
I hope the real Ari can liveup to Ai Ari's expectations
here for me in all seriousness.
(02:05):
I'd say one of the greatest gifts inmy own career over the last few years
is watching you grow in your careerand in the successes that you've had
for victims personally, professionally.
It's just been extraordinary to watchyou and I feel like this podcast is
like a continuation of that, justhonored to be on this journey with you.
I'm so glad to hear you say that.
I was, that was one of the firstthings I was gonna bring up is I feel
(02:27):
like I have definitely been on this.
To bring blockchain competency tostate and local law enforcement
for five years or so now.
And I'm wondering, howlong have you been at TRM?
When did our paths first cross.
I love it.
So about then.
I did this crazy thing after about 15years in US Federal government, most of
(02:49):
those at the Department of Justice as aprosecutor, and then a couple years at the
US Treasury Department I left and joinedwhat was about an eight person startup.
And pretty much five years ago, about fourand a half years ago, and today we're.
But there have been people for me alongthat journey, many of whom are at TRM
today, and you are one of those peoplethat I have watched grow that, that I,
(03:15):
we've shared this mission of not justbuilding a safer financial system,
but helping victims recover funds and,another part of that journey for you.
And at TRM, we've really just lovedsupporting it, whether it's with
the Tracers program or whetherit's other types of things that
we've been able to do together.
So really excited for the conversation.
But yeah, love whatwe've already been doing.
(03:36):
Yeah, we're gonna talk all aboutthe Tracers project and some other
things that we've done together.
But, I think both of us, acommonality that we have is we
both really being prosecutors.
Job for both of us.
So I'm curious what made youleave that job that was so
meaningful to you to come to TRM?
It's a great question.
Lemme back up for one second.
(03:57):
Tell us what TRM is and thentell us why you went there.
I love it.
Terrific.
No, absolutely.
I know we're gonna dig just all thethings that we do, but also just
generally crypto tracing, financialcrime prevention and all of that.
TRM is a blockchain intelligence company.
And that means we provide softwareto a number of different categories.
We provide software tolaw enforcement globally.
(04:18):
You mentioned state, local, federal,global law enforcement entities, and
they use our tool for investigationsto track and trace the flow of
illicit proceeds, whether it'sscam proceeds or hack proceeds.
Ransomware proceeds tobuild investigations.
And hopefully, ultimatelyseize back funds for victims.
We work with regulators who use oursoftware to understand the risks
(04:40):
within their regulated ecosystem.
If you're the SEC, you want a bird'seye view on crypto securities markets.
If you are.
The US Treasury Department and your fins,you wanna understand where are the A ML
risks, the anti-money launder or the moneylaundering risks within that ecosystem.
And finally, we work withcryptocurrency businesses and financial
institutions as a compliance tool.
(05:01):
If you're a large crypto exchange, youwanna make sure that addresses associated
with scams or other illicit activityaren't engaging with your platform.
And compliance professionalsuse our tool for that.
And again, I know we'll dig intoa lot more of how this all works.
For sure, and we're gonna go backto why you were drawn to this.
But one of the things that's importantto me and has always been important
to me as I got into this space isthe understanding that I am, as my
(05:27):
west boys would tell me, I am a noobat finance, at compliance at AML.
Those were all words that werenew to me when I got in this
space just a few years ago.
What I want for this podcast is I wantthat people who have been victims.
Of losing their money can listento this podcast and learn a little
bit more about people who areout there trying to help them.
(05:49):
And throughout this podcast, as we gothrough episodes, we'll be digging in
and trying to understand where thingscould be done better for victims.
So it sounds like what you're sayingthat TRM does is what I understand
your motto to be is making asafer financial future for people.
Yeah, look at TRM we talk about ourmission as building a safer financial
(06:11):
system for billions of people.
And what's really so cool, and I thinkyou'll appreciate having been a prosecutor
and then moved into this new role isthat when I realized five years ago in my
first conversation with Esteban Castano,who's our CEO, and I know a good friend
of yours also that I could continue themission that I'd been on my entire career.
As a prosecutor and then atthe US Treasury Department,
(06:32):
but with a really cool startup.
And that's really what it's been.
And that's what the adventure forme has been over the last four
years is that I could stay on thatmission and yet honestly work with
truly amazing people within TRM andthen also with partners like you.
Yeah, I think envy.
(07:01):
Expertise e create this saferfinancial future that we all want.
I really appreciate that.
Don't believe everythingyou see on the internet.
For sure.
There are definitely very difficultmoments in this job, particularly
in this space where you like, likeyou are dealing with victims who
have lost their life savings andthe frustrations of the day-to-day.
But yes, I have thecoolest job in the world.
(07:21):
I when I was younger, I wanted to bethe shortstop for the New York Yankees.
At some point Derek Jeter, who wasabout my age, stole that job from me.
So I figured being the global headof policy at T RM is pretty cool too.
So that's it's a close second.
Yes.
It's a close second for sure.
Yes.
And it's a team.
It is definitely a team ands.
(07:45):
Time now for a quick breakto thank our sponsors.
Hey friends, I want to let youknow that our first ever sponsor
of stolen a podcast is TRM Labs.
And if you know anything about me, youwill not be surprised by this because I
have relied on TRM labs a number of timesin the past and they have come forward.
(08:07):
To provide training, to provide tools,and now to provide me with the assistance
to bring you this important podcast.
So thank you so much, TRM.
I'm grateful.
Okay, let's talk.
Imagine that we are talkingto a someone who has been.
Who has met someone online, thatperson has led them to believe that
(08:31):
they had a future together, has soldthem a dream of this romance, and has
led them to believe that they couldbecome wealthy by using the same
investment strategy that they used, andthat is investing in cryptocurrency.
So.
The absolute basics ofwhat does that even mean?
Invest in cryptocurrency, that I thinkit's something that the scammers use
(08:52):
against us because people have fomo.
They want to be part ofthis emerging economy.
So what does it really meanto invest in cryptocurrency?
Give us the kind answer to.
No, I love this and I never get askedthis type of question, which I'm always
surprised because I think it's reallyimportant to dig in to the basics.
So let's break down blockchains.
(09:12):
We hear all the time aboutblockchains, and I think there's a
lot of confusion as to what they are.
It's pretty simple.
At their core, a blockchainis a shared digital ledger.
It's a network of computers.
Imagine a spreadsheet that lives on.
No one owns it.
(09:32):
So you can't secretly change itlike you could a spreadsheet, in a
big corporation and commit fraud.
But that's what makes it powerful.
It is a digital ledger.
It creates a permanent, verifiablerecord of transactions, whether
you're moving money, whether you'retracking goods or recording data.
So a blockchain is separate fromcryptocurrency, which I'll get into
(09:53):
for a minute, but block networks.
And that's where theblocks come in, right?
The verifications are buildingthose blocks on that network.
Moving on, I mentioned cryptocurrency.
Where does crypto fit in here?
And crypto is just thenative money of blockchains.
We talked about things that can move on.
(10:14):
Blockchains, right?
Tracking goods, recording data.
Money can also move on.
Blockchains Bitcoin was the first.
Which is essentially designed as digitalcash, outside of government control,
Bitcoin blockchain, and then Bitcoin theasset was built on the Bitcoin blockchain
but crypto's evolved since then.
Today, Ethereum is an entirelyseparate blockchain with a
(10:35):
different, a asset called Ethe.
Again, runs on blockchains, moveson blockchains, but allows you to
run programs over those blockchains.
There are stable coins.
Stable coins are digital assets thatare pegged one-to-one with US dollars
or gold or another stable asset.
When we talk about blockchains,that is the ledger.
(10:57):
And when we talked about cryptothat's the digital money that
moves on these blockchains.
And I know that all sounds still alittle crazy, but the reality is that
like they're just better payment rails.
This is not something totallydifferent in the world.
They're better payment rails.
And now we're seeing sort of financialinstitutions and cryptocurrency
businesses use those rails to movefunds faster and in larger amounts.
(11:21):
But given that this is, I was gonna say,I was gonna say, given this is the stolen
podcast, that's the reality, right?
Like the promise of cryptocurrency.
Is this idea of cross-border valuetransfer at the speed of the internet.
Lawful users can now move funds fasterand in larger amounts than ever before.
We can send more moneyfaster for remittances right
(11:44):
back home to our families.
In Central America.
We can send larger amounts of fundsfaster for humanitarian aid that we can
now send at the speed of the internetfor dissident all across the world.
But who else likes to move money fasterin larger amounts than ever before?
Bad guys, scammers, ransomwareactors, North Korea, and that is
(12:05):
the paradox of cryptocurrency thatI know is very much a focus for
the work that, you and I both do.
Yeah, I was gonna ask you about that.
So I always, when I am stressing to localand state law enforcement that they need
to understand how to use the blockchain asan investigative tool and use tools like
TRM to expedite it and make it easier.
(12:25):
I always say that crypto is howbad guys are moving money, but
there's also decent people movingmoney on the blockchain as well.
It's not all illicitfunds on the blockchain.
Why do bad guys prefer to move money on?
Why is.
Yeah I think the reality is that, badguys will always be early adopters
of transformative technology.
(12:47):
When I was a prosecutor, andit was a while ago I started
like many years ago really.
We were first using pagers and then wewere using cell phones, and then we were
using end-to-end encrypted messagingapplications like Signal and Telegram.
I'm pretty sure the people usingthose end-to-end encrypting apps.
Basically us.
(13:07):
So law enforcement and criminals,mostly terrorist financiers
is, was at least my experience.
I now use end-to-end encrypted messagingapps to organize my kids' basketball team
who's bringing the oranges this week?
And the reality is it's really good tech.
There are people with internationalnumbers, people, especially in
DC, people all over the place.
And we're seeing thesame thing with crypto.
(13:28):
Blockchains allow you to send largeramounts of funds faster than ever before.
Bad guys are of us.
They wanna move.
And more cheaply, and that'swhy we're seeing this.
I will say that like I think universallyaccepted that it's still about 1% of
overall crypto volume is illicit, but that1% is what keeps you and I up at night.
(13:50):
It's really, where people arelosing their life savings.
It's, $1.5 billion hacks.
By North Korea that will fund weaponsproliferation and destabilizing activity.
So I think the reality is badguys are using everything.
They're using investment accounts,they're using networks of ALS and shell
companies and art diamonds, real estatebut they're also using crypto now, and
(14:10):
it's just part of that new toolbox.
What's that term Hawala mean to you?
A money transmitter.
I think of it as sort of broker.
Essentially many of the, like whenyou talk about specific Hawala, you're
talking about entities that maybe arein the Middle East or the Gulf region,
but to me it's actually much broaderthan that and just means , feels
more mom and pop than an exchange.
(14:31):
But someplace that often timeswill engage with Shell companies
or other type of actors where it'sa little easier to move funds.
Particularly if you walk inthe door with a brief case of
cash or something like that.
So it's been my experience with thevictims that I have been talking
to recently that they are beinginstructed to move their money from
their investment account to theirchecking account to a US based
(14:56):
exchange like Coinbase or crypto.com.
Gemini.
What does that mean when wetalk about a crypto exchange?
Sure.
Cryptocurrency exchange isessentially a bank that deals
cryptocurrency, some of the largestcrypto business, the cryptocurrency.
Finance is the largestcryptocurrency exchange on
(15:18):
Earth by 15 times or something.
Essentially, what they allow foris they allow customers to exchange
crypto for fiat and fiat for crypto.
So they're the on and off ramps todayinto that world of blockchains that we
were talking about a moment ago intothat world of networks of computers
where every transaction is logged and.
You need cryptocurrency exchangestoday because we still really
(15:41):
can't buy anything in crypto.
So we need to find those on-ramps, rightto buy and those off ramps ultimately
to sell so we could get fiat currency orcash that we could use in the real world.
Cryptocurrency exchanges are important,certainly for the issues that you
focus on, Erin, in terms of scamsand fraud, because victimes will need
to access those types of platforms.
(16:03):
To exchange their cash or fiatmoney, credit cards, essentially,
use your credit card to buyBitcoin, to buy stable coins, to buy
whatever they need on that platform.
Yeah.
And that leads right into mynext question, which is they are
usually instructed to buy USDTthese days, also known as Tether.
It's a stable coin.
(16:23):
Why is it that the bad guys arechoosing USDT or Tether or a stable.
Bad actors, like I, I say this allthe time because it's really true.
They're just like the rest of us.
They wanna move funds in with theleast amount of friction possible.
And the reality is like, youcan't go use Bitcoin today.
(16:45):
There's this famous story from anumber of years ago where someone
bought a pizza with a Bitcoin, right?
That pizza or 20 Bitcoin or something.
Now that pizza is worth millions ofdollars, multiple tens of millions
of dollars, you can go into yourlocal coffee shop and used Bitcoin.
So bad actors also don't want volatilityin their financial transactions.
(17:06):
So they're looking to stablecoins, which are pegged one to one
to the
US dollar when you're talkingabout Tether or USDT, same with
USDC, which is circles stablecoin.
Same with PayPal.
There are a whole bunch of differentstablecoin issuers and the reason for
using USDT is it is very available.
You can move in a bunch of differentblockchain networks that can
(17:28):
allow you to move funds faster.
And in larger amountsand more cheaply as well.
I think all of this tech someday willlook back on and say, Hey, we talked
about all the illicit activity on acertain blockchain or a certain asset.
And the re reality, you just look back.
It's because they, thosewere like the better, faster,
cheaper places to move funds.
That makes sense.
I'm gonna lead us down another pathand there's gonna be a lot that stems
(17:48):
from it, but what I'm curious about is.
When our victims are going into local lawenforcement these days, they're frequently
being told that the assets are overseasand there's nothing you can do about it.
And for three years, every time Ihear something like that, it makes
my head explode and it gives me anopportunity to educate about how
this is actually the benefit ofthings moving in cryptocurrencies
(18:10):
that we can see where it's going.
So can you explain that a little bitin a way that listeners can understand?
Yeah it's certainly another paradox.
What's so interesting is lawenforcement globally, every US federal
law enforcement agency, many stateand local, as you know, and then
globally, are using tools like TRM totrack and trace funds on blockchains.
And when I find blockchainfor you, hopefully decently.
(18:33):
I talked about it being a verifiable,immutable, traceable, trackable
public ledger, and that allows us totrace and track those transactions.
And crypto is borderless,but so are these tools.
So we're able to watch them.
The flow of funds cross through differentblockchains and different assets.
We're able to watch many fundsmove through what we call mixers,
which are a way to launder ortransactions on chain by bad actors.
(18:58):
They're also used by lawful users to allowfor some privacy in these transactions.
But I say all of that to say thatwe've gotten really good at tracing
transactions on blockchains.
Where we are less good today is continuingto follow those funds off chain.
And off chain is just the real world.
It's what we expect law enforcementglobally to be able to try.
(19:23):
Watch those transactions on a blockchain,but then ultimately be able to follow up.
Did these funds go into acrypto currency exchange.
Wherever that exchange is in theworld, we should use every tool in our
toolbox to reach those funds, whetherit's diplomatic pressure, whether it
potentially sanctions, if it's illicit,if it's an illicit actor or a bad actor,
(19:44):
or whether it's legal process from theUS to a lawful cryptocurrency exchange.
The best case scenario, Erin, andthe best case scenario happens
more often than you think.
Is that the funds go to a largecompliant cryptocurrency exchange where
law enforcement can serve a subpoena.
And the reason they serve asubpoena is that's where you get
to know your customer information.
(20:04):
You can know who's behind anaddress, and then they can
ultimately start to investigate.
As you know, as a prosecutor, I don't haveto tell you, the next thing you do is not
say, all right, what's happening on chain?
Let's get into TRM.
You don't, you say, alright, how canI investigate this case off chain?
And you serve a subpoena.
Now that you have the information youserve a subpoena on a or a search warrant
(20:25):
on Google for their Gmail records,or Microsoft for Hotmail records or
Outlook, you then go to their cell phonecarrier and say, Hey, I wanna see all
the cell tower data on this person.
You maybe execute a search warrant whereyou might find different types of things.
One of the nice things about crypto toois there's a lot of cooperation across
border that might not involve the sortof archaic mutual legal assistance
(20:48):
treaties and other types of tools thatwe have always used as prosecutors which
are slow and laborious a lot of times.
There's really good publicprivate partnerships.
There's a lot of cooperation.
I think there's a lot to do.
I think you're gonna dig into a lot moreof the things that we could be doing.
There's so many answers to questionand excited where you're taking it.
(21:09):
I would say that I think things havechanged dramatically since I first
started doing these investigations.
My, when I say I, let's be clear, I wasworking with an elite task force of local
and state, primarily local investigatorswho knew how to trace cryptocurrency
early because we had some experience withcryptocurrency back with SIM swappers.
(21:31):
And what we found, we went with awhat if we could attitude about this
that we saw when we got our FI firstpig butchering case and saw that
it went to Binance back in 2022.
We didn't know how cooperative ornot cooperative Binance would be, and
we were delighted to see that eventhough Binance was located outside the
(21:52):
United States, they were willing to.
Ultimately give back that money thathad been stolen from the victims, that
we could get it back to the victim.
But I also remember when we starteddoing this more and more in 22 and 23,
there were certain exchanges where we'dsay, oh, well they're not gonna respond.
They're not gonna respond.
And what I've seen as we'vemoved forward is that more and
(22:14):
more are becoming compliant.
Has that been your experience?
Absolutely.
I mean the early days did feellike there were a handful that just
no man's land where you weren't gonnaget response to any type of process.
I think that's much less so truetoday, and I think that most vast
virtual asset service providers at theFinancial Action Task force likes to call
(22:35):
essentially cryptocurrency exchanges.
Now, their crypto businesses have builtout pretty robust compliance functions.
They're all using TRM.
Compliance professionals.
And they're really monitoring and they'reresponding to law enforcement subpoena.
They have policies and proceduresin place, and I think some
of it is, look, regulation isbecoming more and more global.
There's certainly now standardsacross so many jurisdictions when
(22:57):
it comes to anti-money laundering.
So regulators, whether it's27 member states in Europe,
whether it's in the states.
Cryptocurrency have compliance control in,and now that isn't to say there is not.
(23:18):
I famously, a couple years ago onTRM Talks, which is my podcast or
our podcast, interviewed Todd Conlin,who is a super senior official at the
US Treasury Department at the time.
And he used this term, and I'vestolen it so many times, but I'm
gonna give him credit because thisis high profile stuff right now.
Erin he said there's an illicitunderbelly of the cryptocurrency
ecosystem and that still exists.
(23:39):
Noncompliant cryptocurrency,many of been sanction by
the U.S. Treasury Department.
Suex, Chatex, Garantex, Bitzloto.
The list goes on and on.
Huione is a essentially a exchangeror series of different services that
have allowed for a number of differentmoney laundering groups, whether
(24:00):
it's North Korea funds, whether it'sscams or pig booking funds was just
essentially sanctioned in by sen, whichis the anti-money laundering regulator.
You're skipping ahead and I love it.
Let's go to, I'm so sorry.
We're rock and roll.
No, let's go to way one, let's go way one.
So I'll stop there.
Before we do, so my point is,there's still this illicit underbelly
and if, and people ask me allthe time, where are the gaps?
(24:21):
Like, where are the gapsthat we're seeing in this?
And they're those places.
And we need to use every toolin the toolbox, go after them.
And fin from the US Treasury Departmentused one of those tools this week.
And I know Erin, you and I were bothreally happy to see that we were ecstatic
and that whole concept of use, every toolin the toolbox is something that we've
both been talking about for a long time.
(24:42):
That, my focus is on transnationalorganized crime and the scamming that
they're doing, taking billions andbillions of dollars from all over the
world and human trafficking as part of it.
And there's no one way thatwe're going to stop this.
It isn't going to just be conquered bylaw enforcement alone, or banking alone,
(25:03):
or social media alone, but that we shouldbe using every tool in our arsenal.
And the Huione takedown or at leastthe mentioned by FinCEN is a huge deal.
And I'd love you to explain in clearlanguage what that means and why this
relates exactly to pig butchering.
Absolutely.
Before we get there, I'll tell you,I was on the phone this morning with
(25:25):
Jake Sims, who is a good friend ofmine and a Cambodian country expert,
and he said, we've gotta talk.
Huione.
And I thought, he said Huione.
And I was like, we did win.
Like this is a big win for people whodon't like transnational organized crime.
So go ahead.
(25:46):
Erin really,
What are the tools, right?
We know that we're good at tracingcryptocurrency transactions and we
can trace and track stolen funds.
But what are the other tools that wecan use to take out these criminal
organizations that are engaged inthis scam activity at scale, pig
butchering at scale human trafficking.
(26:07):
At scale, how do we use other tools?
And I think sanctions issomething that you and I have
talked about for a long time.
How can OFAC, the Office of ForeignAsset Control, the US Treasury
Department implement sanctions?
How can FinCEN, which is theFinancial Intelligence Unit at
the US Treasury Department, theFinancial Crimes Enforcement
Network, what tools do they have?
And this week, FinCEN used a very specificSection three 11 of the Patriot Act.
(26:32):
And went after Huione, which is reallya financial conduit for a broad range
of cyber enabled criminal activity,which includes pig butchering scams,
transnational fraud networks, and thetypes of hacks committed by North Korea.
FinCEN found that between 2021 and thisyear Huione laundered about 4 billion
(26:56):
illicit proceeds, including including morethan 37 million linked to North Korea.
36 million stemming from scam activity.
Our numbers at TRM arehonestly higher than that.
I think I'm breaking some news rightnow 'cause I don't know that I've
shared this with anybody else, but wejust pulled some data that said in 2024
we found that at least 120 million inexposure to Huione from scams close
(27:19):
to 80%, of which we have evidence thatthat specific scam was pig butchering.
This is.
Money laundering at scale forthe very worst cyber criminals
and scammers in the world.
So what is a three 11under the Patriot Act?
Basically, it allows for FinCENto take one of five different
actions against an entity.
(27:41):
It could be anything from increasedreporting requirements for US
financial institutions, all the way to.
requiring US financial institutionsto block the entity from engaging
with the US financial system.
It's essentially the equivalentof the death penalty or a foreign
financial institution, and that waswhat FinCen is recommending for Huione.
(28:04):
So we'll see.
Ultimately, there's a notice ofproposed rulemaking asking for that.
It feels not that controversial to me.
So hopeful that will beultimately what happens here.
But there are other tools.
If this is anything, it reallyshows, I believe that the US Treasury
Department where, I worked and havereally good relationships with really
the, some of the best subject matterexperts in the space are focused
(28:26):
on using every tool in the toolbox.
So, yeah.
I think it's a cool moment.
It's early.
There's a lot of other tools wecan use and interested to see like
where else we deploy authorities.
Yeah, I loved hearing it because itwas one of the first big moves by the
US government against transnationalorganized scammers like this.
(28:49):
And I was recently in Cambodia and I cantell you that there's a new road that
constructed by China that goes from PhnomPhen down to Sihanoukville where a lot
of this illicit activity is going on.
And at every
overpass, there is an ad for Huione.
It's very much the Cambodianfinancial business.
And to eliminate their access to or toat least recommend the elimination of
(29:14):
their access to the American bankingsystem is a huge, huge deal and I'm
super impressed and really glad thatwe find ourselves here in May 2025.
We're making positive movement.
Absolutely.
Time now for a quick breakto thank our sponsors.
(29:35):
Hey friends, I just wanna thank TRM Labs,our first ever sponsor of the podcast.
I love their message.
They're building a safer financialsystem for billions of people.
And that's exactly what weare trying to do as well.
Create a safer situation for peoplewho are going about their daily lives
(29:55):
and engaging with digital media.
But I wanna take you back.
We sidetracked on who, which I wantedto get there anyway, but I. Some of the
ways that TRM has specifically been ableto help state and local law enforcement,
and that was in that if we're askingstate and local law enforcement to
(30:17):
embrace an entirely new way of doinginvestigation, they're gonna need tools
and they're going to need training.
And so I wanna talk to you a little bitabout what I've, what TRM specifically
did for this crypto coalition that.
When I say I, let's be clear againthat a group of investigators.
(30:44):
Awarded state and local individuallaw enforcement agencies a
number of licenses to your tool.
Why did you do that?
Thank you for bringing that up.
And I really, as you and I have talkedprivately, I'm so hopeful that we'll
be able to do more like this together.
And I know we will so many of us at TRMfrom Esteban Castano, who is out CEO.
(31:06):
To quite frankly all the formerU.S. and global law enforcement
folks that been hired there.
Christian Cheski, and Kyle Armstrong,
and Sujit Raman, and Nick Carlsen.
And just really across, PhilArris from the UK law enforcement.
And so many others.
We went to TRM for this mission.
Really exactly the reason you left thegovernment to go to Shamrock full time,
and that is you felt like you couldhave an impact at scale in a way that
(31:29):
you just can't when you're doing theindividual cases day in and day out.
Rita Martin talks about this all thetime from former Secret Service at TRM,
Taylor Windemouth who leads our training.
If you look around our company,it's like, none of these people
left the government for the money.
We left because really we werealigned to a mission, and I think
that Esteban and Rahul Raina, whoco-founders like to their credit, are
(31:51):
just so aligned with that mission.
So this idea of, Hey, let's give licensesto jurisdictions that don't have the
resources, but really need this to learn.
This stuff just felt really alignedto that mission to build a safer
financial system, and we're alwayslooking for ways to do more like that.
One of the next crazy ideas I hadafter, would you please give some
licenses to local and state, was Ireally wanted a place where any victim
(32:15):
in the United States, no matter wherethey were located, could make a report
and have a qualified investigator takea look at that report in real time.
And TRM helped us build that with theOperation Shamrock portal to chain abuse.
Tell me a little bit about whyyou built chain abuse and how this
Operation Shamrock Portal works.
I'd say there's a number ofdifferent reasons why chain abuse
(32:40):
and it was really like we lookedaround and said how can this
industry do more on its own.
Right?
How can we do more withoutregulators, without government?
And the idea was that because of thosenative qualities of public blockchains
that I was talking about earlier,they're transparent, they're immutable.
We can actually take, if youhave addresses then investigators
can dive right in and be able toinvestigate whether they're folks
(33:03):
who are TRM, whether there arefolks who are in law enforcement.
So it was TRM led, but thisis some of the largest.
Businesses in the Uniswap and Circleand Binance all were part of, and
are part of today of chain abuse.
So what is it?
It's the largest reportingdatabase of scams and fraud
within the crypto ecosystem.
(33:23):
We've had a million plus reports in thelast just two years, been in existence.
It's a place where if you are a victimor you see a scam you can alert.
other people who are part ofthis chain abuse community.
And you also alert lawenforcement through the portal.
And we were running thisfor a number of years.
I think it became a really goodresource for law enforcement and
for also individuals in the space.
(33:46):
It just became so obviousthat it was something so cool.
I think that we always arelooking for ways to partner
with you and what your building.
And
I think what you have an incrediblenetwork of state and local
law enforcement, but alsovictims and people who are very
engaged with what you're doing.
And we wanted to build a portalthat could directly engage with
(34:07):
chain abuse for Operation Shamrock.
And to be clear about it, if you go tothe operation shamrock org website, if
you're a victim and you click on filea report, it will take you directly
to this site, this chain abuse TRMsite, where one of our investigators
will get that and be able to.
Be able to at least.
What I always wanted for victims wassomeone to just be honest with them
(34:29):
about whether there was anythingthat could be done or whether
really things had been exhausted.
And that's what you will get isyou'll get someone who will look at
it, who knows what they're doing, andthey will tell you the truth whether
you like it or don't like it, butat least you will have an answer.
I think that's what's been lacking forso long, for so many victims in the
United States that didn't know whathelpless and didn't feel like they
(34:54):
had a place that they could trust.
And one thing just to say, becausethis is such an extraordinary
platform and you have such an amazingfollowing, that like the more ears
that this can reach the better.
Chain abuse is not a recovery.
Yes, we do offer recover services.
You cannot get recoveryhelp through our platform.
We are a reporting database.
So when you are on the OperationShamrock site and you go to chain
(35:15):
abuse, you are there just to reportanyone who is reaching out to you
saying that they're chain abuse.
Saying that they're Ari Redbord sayingthat they're Christian Cheski saying that
they're Erin West saying that they dorecovery services, they're chain abuse
recovery Gmail, they're a chain abuse.
These, this not real chain abuseand they are there to revictimize
(35:38):
victims of victims, pig butcheringand other types of crime.
And it's just something that wereally need to get the word out on.
Maybe this could be a socialclip for you, Erin, so we can
like I'm definitely using it.
We have really, so we couldget more people to see this.
'cause it breaks ourhearts, it breaks our heart.
And I love being a partner with youon this because like I feel you and I
(35:58):
could uniquely utilize these platformsto make sure that people aren't.
That people aren't getting
the services that they need.
Without revictimized here, it's oneof the worst parts of all of this.
It all breaks my heart.
I think there's nothing worse thanthat because maybe it like goes to our
core business and what we do, right?
Trying to stop bad actors and peopleimpersonating us or chain abuse or you,
(36:19):
there's just nothing that makes me madder.
It really does make us mad.
Thank you for bringing that up.
Speaking of reporting platforms, the FBI's
IC3 report.
I was not at all surprisedand in fact I thought that the
numbers might even be lower thanI thought they were going to be.
(36:41):
The numbers I always look at are,number one, I always look to see where
California is located in the States, andI am really disappointed to see that we
continue to be number one and number oneby a long shot in terms of complaints
with cryptocurrency related theft.
Amount lost in cryptocurrency relatedthefts, but the numbers that matter to me
(37:04):
are when we break it down by crime type.
And we see investment scamat the top of the list.
In 2023, it was 4.5 billion.
This year it's almost 6.5billion, and that's a jump of 44%.
And I'm wondering what stood outto you about crime types when you
(37:25):
looked at that IC three report.
A couple things.
I wanna make sure I have my numbersright, so I apologize for this.
No, I'm, glad you're checking.
I think mine are right but ya.
Yours are right for the report, but Ihave some numbers that we juxtapose.
So I'm just gonna kind of jump in here.
Ya look, I think the report is excellent.
It usually is, and I think it's a reallygood baseline to really understand what
(37:47):
are the threats, what are the typologies?
And then I do agree, we always take areally hard look at the states to see
which ones we really should be focused on.
Just to give you like a littlesome, a few data points, the TRM
labs, our 2025 crypto crime reportis actually pretty consistent.
Essentially reinforces a lot of thetrends that you're reading about in the.
We identified about 10.7 billionin crypto funds sent to fraudulent
(38:12):
schemes with pig butchering, again,being the largest piece of that.
We saw about 5.8 billion in pigbutchering related scams in 2024.
Essentially the same periodthat the I CT report comes out.
One thing that's really important,and I believe it says in says.
(38:32):
Sort of conventional wisdom or the numberI see out there, you probably see this
more Erin, so you might chime in here.
Only about 15% of victims of pigbutchering and other scams even report.
So if you're seeing an $11 million I'msorry, $11 billion, $12 billion number,
you could probably multiply that by 15.
I'm sorry.
I was like, that's a lot.
(38:52):
But yeah, I'm sorry.
You could probably multiply thatby another, assume that that's only
about 15% of the total volume here.
It's significantly, significantly higher.
I think that's a really important part forpeople to understand as they're doing it.
We're talking this a multi hundred billionproblem that we're seeing here in the.
I really think it's importantto put numbers on this, and
(39:13):
I'm so glad that IC three did.
I think that their trends are spot on.
Yeah.
Their trends are definitely spot onand to me, what is alarming and what
continues to keep me up at night isthe percentage increase of a certain
crime type, and that takes us back towhat FIN is doing, and that is that
we need to put more tools on this andwe need to recognize the alarming.
(39:36):
Criminal behavior, I will say.
And it's early in this administrationand where we're going in the us but in
talking to law enforcement, really acrossthe United States and really globally
as well, there has been a shift andalso I'd say that the shift in the way
we're building A TRM also, and beforeit was tracing individual cases, Hey,
(39:57):
I wanna follow these specific funds andunderstand where to network understanding.
How operate.
I think that's becoming more important.
That's something thatwe're thinking a lot.
A lot of the reason we're using AI atscale now in the tool is to understand
(40:17):
patterns and networks better, butthat's what law enforcement is doing.
And this Huione today or yesterday wascertainly about this one entity and
it was certainly about Cambodia, buthonestly it was about much, much more.
And that is understand what are.
And I think we're gonnasee a lot more of that.
(40:39):
You and I have talked about thisidea of all roads lead to China.
We've been able to identify online,link on chain links between North Korea
cyber criminals and some of these pigbutchering operations to understand who
are the money laundering networks thatare supporting them, the Chinese money
laundering organizations, the Chinese.
I say all that to say that I do thinkwe're moving in the right direction.
(41:01):
This is an example.
But we have to do, there's a lotmore we can do and I certainly have
some thoughts about some of the otherthings that we could do as well.
Do you wanna jump to that or as I,I was gonna take, I was gonna save
that for the end, and I was gonnatake you in a different direction.
And I'm the boss, so I'm gonnatake an end a different direction.
Take me in a different direction.
Let's go.
You're such, oh my God,you're so the boss.
Nothing more true has ever been said.
(41:28):
Time now for a quick breakto thank our sponsors.
Thank you so much to our sponsor.
TRM, if you don't know what they do, TRMand its blockchain analytics capability is
what makes it possible for law enforcementto be able to trace these funds back
to the bad actors and recover them.
(41:49):
We couldn't do the work wedo for victims without TR.
M Labs.
So I'm so grateful that theydecided to sponsor our podcast.
So one of the things I like a lotabout you is obvious to me when I
think about the TRM Running Club.
So what can you tell me aboutthe TRM Running Club and then I'm
(42:10):
gonna tell you why I think theTRM Running Club is so important.
Wow.
I love that.
I can't wait to hearwhy it's so important.
The TRM running club is totally, my babyTRM is a little, my baby T RM running club
is just like, I pinch myself sometimes.
It started out, basically I'm a runner.
My wife Kelly got me into running, Idunno, 20 years ago and I haven't stopped.
Mostly it's chasing her around 'causeshe is a much better runner than I am.
(42:34):
But we're trying to run amarathon in every state.
So I'm training and I travel a
somewhere in.
I would usually, have a couple drinksand probably eat a big meal, and the
next day I would just wanna snooze.
But I started inviting people to runwith me in cities around the world,
and two people would show up in Parisand it really became a forcing function
(42:57):
for me to get up in the morning.
If you tell the entire internetto meet you at your hotel in
London, you have to make sure.
All of a sudden last year in AustinConsensus, which is the largest crypto
conference in the world, reachedout and asked to make an official
event, and that was really special.
So we had about 75 people show up inAustin, and it's taken off since then.
(43:18):
It's been an official event of prettymuch all of the, or many of the major
crypto and compliance conferencesjust got back from Hollywood, Florida.
It.
Singapore FinTech Festival.
We have a group going at 0.0forum in Zurich next week.
(43:38):
The following week, we're back asanother official event of consensus.
So it's just so crazy.
I'll tell you a funny story thatI, I don't think I've ever told.
Certainly not publicly.
At Consensus last year.
I was there early.
I always bring hats.
Everyone who runs with gets a specialTRM, Nike hat and setting stuff.
Bought some Gatorades Professional usual.
(44:02):
Maybe 20 minutes earlier.
So he says, wow.
So you go around the world organizing,running clubs for conferences.
And I said, wow, that job ismaybe cooler than the one I have.
Maybe that is what I should do.
That's what Kevin West should do.
Oh, actually put him on that age21, put him to work, but really
(44:22):
become a special thing and.
Really interesting stuff, whether it'scrypto stuff, whether it's compliance,
whether it's law enforcement.
There's no other running club inthe world where you have a bunch
of crypto bros running with FBII agents and state and locals.
Exactly.
And state and locals.
It's a really neat thing.
(44:43):
So thanks for asking the question.
I don't think I've ever been askedabout TRM Running club on a podcast
before, so that's pretty cool.
I'm glad that you appreciatedit because TRM Running Club.
That we can make major change when webuild communities and when we build
communities, especially a communitylike a running club community where
you have to do hard work together.
(45:03):
That may not be hard work for you,but for most runners, it is hard work.
And I think that you create a differentlevel of familiarity and with people when
you have done something difficult with.
We know on at conferences that whenwe go and do other events with them,
it's good because we get to knowpeople better on a different level.
But I think that the TRM Running Clubis a really good way to build those
(45:26):
relationships that are the relationshipsthat matter when you are trying to
fix something that seems unfixable.
Yeah.
For, I know this is a podcast,so it's only on audio, but.
The reason I do have the coolest jobin the world is I get to do stuff like
this and with people like you, Erin.
(45:47):
So it's, yeah, it's really cool.
And the conversations outthere in these like beautiful
places are absolutely amazing.
And some of it's about crypto,some of it is about illicit
finance and stopping bad guys.
But I'll tell you, a lot of it isabout people's kids and their families
and like where they're traveling to.
How hard travel is on familiesand it's the ultimate in community
(46:07):
building and I appreciate you sayingthat, like more than anything.
Oh, good.
Yeah, no, I'm impressed with you.
I think that's how we make change.
I know I've been talking to you for almostan hour and I have literally, I've got a
whole bunch more questions for you, butso where, how do you think if you had to
find one, I don't wanna ask it that waybecause I don't wanna ask you one tool
because I, that's not a helpful question.
(46:28):
I wanna know, if you had a chanceto put a lot more emphasis in one
area right now that you think would reallybe disruptive to transnational organized
crime, what do you think that would be?
It's going after China usingevery tool in the toolbox.
I know this administration isfocused on that, and I think
that's a very good thing.
We have written about how all roadslead to China when it comes to
(46:51):
money laundering and Chinese moneylaundering organizations, triads,
criminal networks, gangs, are laundering
scam procedes, pig butchering proceeds.
They are launderingNorth Korea hack funds.
They're laundering money for cartels.
We've written a fair amount about this,but are gonna continue to write more.
So I think it's using every tool in thetoolbox and obviously crypto tracing
(47:15):
and investigations is part of that.
So are sanctions, I've mentioned thisbefore, but when I was a prosecutor
I worked with on a team with Zia,who's now a federal judge, and Nick
Carlson, who's atm and Kyle Armstrong.
And.
It's the only time it's ever beendone and still no one's done it again.
(47:37):
The idea of it is that the US mightnot have jurisdiction over that
bank, but if it doesn't providerecords, the US can cut off.
Its correspondent banking, whichis essentially a death penalty.
And ultimately after some litigation, thebank implied how much did they provide?
Not sure, but it was something,and the reality is we can
use these types of tools.
(47:58):
We can cut off correspondentbanking to a small Chinese bank.
We could use offensive cybertools to go after bad actors.
We just designated Cartels as foreignterrorist organizations and they're, and
there are way that opens up a whole bunchof Department of Defense operational
(48:19):
tools now that exist in that realm.
It's just important to know, and wedon't have all of those things and
certainly not all of those things at once.
But it's important to know that there aretools at our disposal and we can use them.
I'm looking forward to what the NationalSecurity Council, treasury Department,
the State Department, the DOD, theintelligence community, where they
(48:40):
ultimately land on how to use these tools.
You said a couple of importantthings there, and one of
them was we have these tools.
The second thing you told me whenyou rattled off those names that
are big heroes to those of us inthis industry who follow this.
You were at a what if we could moment.
Nobody had served a subpoena on a Chinesebank before and you chose to do the
(49:02):
hard thing, and so how do we encouragepeople to be more innovative and more
creative and more willing to step out alittle bit from what's always been done?
We need more Zia Faruquis in theworld, to be honest with you.
He was the prosecutor I'veseen in still this day.
He would up all night and dothings because it was right.
(49:24):
This was totally one of thosecrazy, smart, aggressive
moves that only he would do.
And I was lucky to be a part of it.
And I think that any, all of us whowere part of that, I'll never forget it.
I'll never forget sitting down withJesse Lou, who was the US attorney,
for the District of Columbia at thetime and convincing her to do this.
(49:45):
To reach out to the AttorneyGeneral of the United States to
reach out to the Treasury secretarywho had to approve us doing this.
You need more Jesse l in theworld, people who are leaders who
basically support their people.
I think you and I are all aboutcommunity and all about the people.
At the end of the day, we need to ensurethat there are more people who are
willing to do things that might seemcrazy or aggressive in the moment but
(50:10):
are the right thing to do ultimately.
I couldn't agree more.
I think that is how we move the ball.
That is how we make things justa little bit better every day.
The way we've always done thingsisn't going to work in this
new place we find ourselves.
So it's important to think of differentways to do it and to be willing
to test limits when it's right.
And I think that was a reallyimportant thing of what you said
(50:32):
is you named people who did thingsbecause it was the right thing to do.
So I appreciate that.
As we're leaving, one of the thingsthat state and local law enforcement
need more than anything besides tools istraining and TRM has started bootcamps
where you are out in, you're out inthe woods with us doing training.
Tell me how that's going.
You've already been to San Francisco,you've already been to California.
(50:54):
It looks like you're going to Denver.
You've got other cities on the, tellme what was the impetus for this?
Yeah, it's really cool.
And it's very Erin West, honestly.
It's just like, what if we couldtype of thing and it's like we have
a really cool TRM Academy, which isour training platform, and we're often
doing presentations at conferences andother things, and this is like, Hey,
how do we just get on the road and openthis up to anyone who need this type
(51:19):
of training and capability training?
And it's tool agnostic.
It's how do you do crypto investigations?
You mentioned all those cities,and it's like, I feel like it's
a rock and roll tour where you'rejust like, I want the t-shirt.
You need shirts.
I don't know.
I don't think we've made the shirt.
All the tour dates need.
Mm-hmm.
Yeah.
I was in New York last week.
Last week, yep.
With Karma Armstrong and MichaelPavlik and Patrick South, and folks
(51:39):
who were leading that training.
I was just watchingFanboying, what Michael
and Tom were doing in particular.
And I know you know and love Tom.
I do.
It was awesome to see the response.
They're fun.
We had a happy hour afterwards.
What is it?
Go for the training, stay forthe happy hour kind of thing.
You build community.
You build community andit is really important.
(51:59):
Yeah, and the conversations wereawesome and it was a mix of, there
were regulators in there, therewas law enforcement in there and
there was private sector in there.
It's a really neat thing and I reallyappreciate you asking about it.
It's us just trying to get out thereit a way where people can engage.
We are in a world wherebudgets are tighter than ever.
And to the extent that we can go towhere people are I think it can me
(52:21):
more meaningful and useful than ever..
It also brings people of their owncommunity together where sometimes you
don't know the regulators in your area.
Sometimes you don't know the industry,the law enforcement in your area.
I think it's great opportunity to bringtogether the people in your neighborhood.
Ari, it's a pleasure to beassociated with someone who does
the right thing and who works witha team that does the right thing.
(52:43):
And I'm super grateful for yoursponsorship of this podcast, but I'm
even more grateful for you spendingan hour with me on a Friday night.
So Friday evening, it's a beautiful,it's a beautiful afternoon
in California, so thank you.
It's beautiful here in DC too.
You could probably just seethe sun shining through my
window here in Georgetown.
Erin, again, your relationship, ourrelationship is one of the great things
(53:05):
about my career and I'm so grateful.
And when you told me you were doingthis podcast, it was like, wow.
Yet another thing that you're buildingand building is hard, but you've done this
really extraordinary thing and I know it'sgonna, get, just get bigger and bigger.
I mean, you're like a correspondent now.
You're like a journalist..
(53:26):
Your on the scene of like warzones and all over the world.
You are a prosecutor and a communitybuilder, and now you're like a on location
journalist and now you have a podcast.
I don't know, like whatare we gonna do next?
Reality show.
I'm mission focused Ari.
I'm gonna use everything in my arsenal.
Thanks again for being here today,and thanks friends for tuning in.
I'm so glad that you spent some time withus and I hope that we were able to break
(53:49):
down some of this into usable chunksthat are meaningful to you and help you
understand how this bad activity is beingdone and what's being done about it.
Well I look forward toa part of all of it.
Hi friends.
Today we are here withone of my good friends.
We are here with Ari Redbord, who isthe global head of policy for TRM Labs.
They're the sponsor of today's episodeand have been very good friends
to me personally and to state andlocal law enforcement generally.
So I'm delighted to have Ari aboard today.
And I have to tell you that beforewe started the podcast just a few
(01:23):
minutes ago, I was like, let'ssee what chat GPT says about this.
So I asked chat, GPT,do you know Ari Redbord?
And it did, it told me thatyou're a well-known expert.
And then knowing what it knowsabout me, I said, what questions
would you ask him on a podcastabout transnational organized crime?
And here's what it.
Interview Ari Redbord on a podcastabout transnational organized
(01:45):
crime, especially with yourfocus on scams and pig butchering
would be a gold mine of insight.
So let's unpack this gold mine.
Let's get some or carts moving it out.
Rie, thank you for being here today.
Erin, I'm so happy to be here.
I hope the real Ari can liveup to Ai Ari's expectations
here for me in all seriousness.
(02:05):
I'd say one of the greatest gifts inmy own career over the last few years
is watching you grow in your careerand in the successes that you've had
for victims personally, professionally.
It's just been extraordinary to watchyou and I feel like this podcast is
like a continuation of that, justhonored to be on this journey with you.
I'm so glad to hear you say that.
I was, that was one of the firstthings I was gonna bring up is I feel
(02:27):
like I have definitely been on this.
To bring blockchain competency tostate and local law enforcement
for five years or so now.
And I'm wondering, howlong have you been at TRM?
When did our paths first cross.
I love it.
So about then.
I did this crazy thing after about 15years in US Federal government, most of
(02:49):
those at the Department of Justice as aprosecutor, and then a couple years at the
US Treasury Department I left and joinedwhat was about an eight person startup.
And pretty much five years ago, about fourand a half years ago, and today we're.
But there have been people for me alongthat journey, many of whom are at TRM
today, and you are one of those peoplethat I have watched grow that, that I,
(03:15):
we've shared this mission of not justbuilding a safer financial system,
but helping victims recover funds and,another part of that journey for you.
And at TRM, we've really just lovedsupporting it, whether it's with
the Tracers program or whetherit's other types of things that
we've been able to do together.
So really excited for the conversation.
But yeah, love whatwe've already been doing.
(03:36):
Yeah, we're gonna talk all aboutthe Tracers project and some other
things that we've done together.
But, I think both of us, acommonality that we have is we
both really being prosecutors.
Job for both of us.
So I'm curious what made youleave that job that was so
meaningful to you to come to TRM?
It's a great question.
Lemme back up for one second.
(03:57):
Tell us what TRM is and thentell us why you went there.
I love it.
Terrific.
No, absolutely.
I know we're gonna dig just all thethings that we do, but also just
generally crypto tracing, financialcrime prevention and all of that.
TRM is a blockchain intelligence company.
And that means we provide softwareto a number of different categories.
We provide software tolaw enforcement globally.
(04:18):
You mentioned state, local, federal,global law enforcement entities, and
they use our tool for investigationsto track and trace the flow of
illicit proceeds, whether it'sscam proceeds or hack proceeds.
Ransomware proceeds tobuild investigations.
And hopefully, ultimatelyseize back funds for victims.
We work with regulators who use oursoftware to understand the risks
(04:40):
within their regulated ecosystem.
If you're the SEC, you want a bird'seye view on crypto securities markets.
If you are.
The US Treasury Department and your fins,you wanna understand where are the A ML
risks, the anti-money launder or the moneylaundering risks within that ecosystem.
And finally, we work withcryptocurrency businesses and financial
institutions as a compliance tool.
(05:01):
If you're a large crypto exchange, youwanna make sure that addresses associated
with scams or other illicit activityaren't engaging with your platform.
And compliance professionalsuse our tool for that.
And again, I know we'll dig intoa lot more of how this all works.
For sure, and we're gonna go backto why you were drawn to this.
But one of the things that's importantto me and has always been important
to me as I got into this space isthe understanding that I am, as my
(05:27):
west boys would tell me, I am a noobat finance, at compliance at AML.
Those were all words that werenew to me when I got in this
space just a few years ago.
What I want for this podcast is I wantthat people who have been victims.
Of losing their money can listento this podcast and learn a little
bit more about people who areout there trying to help them.
(05:49):
And throughout this podcast, as we gothrough episodes, we'll be digging in
and trying to understand where thingscould be done better for victims.
So it sounds like what you're sayingthat TRM does is what I understand
your motto to be is making asafer financial future for people.
Yeah, look at TRM we talk about ourmission as building a safer financial
(06:11):
system for billions of people.
And what's really so cool, and I thinkyou'll appreciate having been a prosecutor
and then moved into this new role isthat when I realized five years ago in my
first conversation with Esteban Castano,who's our CEO, and I know a good friend
of yours also that I could continue themission that I'd been on my entire career.
As a prosecutor and then atthe US Treasury Department,
(06:32):
but with a really cool startup.
And that's really what it's been.
And that's what the adventure forme has been over the last four
years is that I could stay on thatmission and yet honestly work with
truly amazing people within TRM andthen also with partners like you.
Yeah, I think envy.
(07:01):
Expertise e create this saferfinancial future that we all want.
I really appreciate that.
Don't believe everythingyou see on the internet.
For sure.
There are definitely very difficultmoments in this job, particularly
in this space where you like, likeyou are dealing with victims who
have lost their life savings andthe frustrations of the day-to-day.
But yes, I have thecoolest job in the world.
(07:21):
I when I was younger, I wanted to bethe shortstop for the New York Yankees.
At some point Derek Jeter, who wasabout my age, stole that job from me.
So I figured being the global headof policy at T RM is pretty cool too.
So that's it's a close second.
Yes.
It's a close second for sure.
Yes.
And it's a team.
It is definitely a team ands.
(07:45):
Time now for a quick breakto thank our sponsors.
Hey friends, I want to let youknow that our first ever sponsor
of stolen a podcast is TRM Labs.
And if you know anything about me, youwill not be surprised by this because I
have relied on TRM labs a number of timesin the past and they have come forward.
(08:07):
To provide training, to provide tools,and now to provide me with the assistance
to bring you this important podcast.
So thank you so much, TRM.
I'm grateful.
Okay, let's talk.
Imagine that we are talkingto a someone who has been.
Who has met someone online, thatperson has led them to believe that
(08:31):
they had a future together, has soldthem a dream of this romance, and has
led them to believe that they couldbecome wealthy by using the same
investment strategy that they used, andthat is investing in cryptocurrency.
So.
The absolute basics ofwhat does that even mean?
Invest in cryptocurrency, that I thinkit's something that the scammers use
(08:52):
against us because people have fomo.
They want to be part ofthis emerging economy.
So what does it really meanto invest in cryptocurrency?
Give us the kind answer to.
No, I love this and I never get askedthis type of question, which I'm always
surprised because I think it's reallyimportant to dig in to the basics.
So let's break down blockchains.
(09:12):
We hear all the time aboutblockchains, and I think there's a
lot of confusion as to what they are.
It's pretty simple.
At their core, a blockchainis a shared digital ledger.
It's a network of computers.
Imagine a spreadsheet that lives on.
No one owns it.
(09:32):
So you can't secretly change itlike you could a spreadsheet, in a
big corporation and commit fraud.
But that's what makes it powerful.
It is a digital ledger.
It creates a permanent, verifiablerecord of transactions, whether
you're moving money, whether you'retracking goods or recording data.
So a blockchain is separate fromcryptocurrency, which I'll get into
(09:53):
for a minute, but block networks.
And that's where theblocks come in, right?
The verifications are buildingthose blocks on that network.
Moving on, I mentioned cryptocurrency.
Where does crypto fit in here?
And crypto is just thenative money of blockchains.
We talked about things that can move on.
(10:14):
Blockchains, right?
Tracking goods, recording data.
Money can also move on.
Blockchains Bitcoin was the first.
Which is essentially designed as digitalcash, outside of government control,
Bitcoin blockchain, and then Bitcoin theasset was built on the Bitcoin blockchain
but crypto's evolved since then.
Today, Ethereum is an entirelyseparate blockchain with a
(10:35):
different, a asset called Ethe.
Again, runs on blockchains, moveson blockchains, but allows you to
run programs over those blockchains.
There are stable coins.
Stable coins are digital assets thatare pegged one-to-one with US dollars
or gold or another stable asset.
When we talk about blockchains,that is the ledger.
(10:57):
And when we talked about cryptothat's the digital money that
moves on these blockchains.
And I know that all sounds still alittle crazy, but the reality is that
like they're just better payment rails.
This is not something totallydifferent in the world.
They're better payment rails.
And now we're seeing sort of financialinstitutions and cryptocurrency
businesses use those rails to movefunds faster and in larger amounts.
(11:21):
But given that this is, I was gonna say,I was gonna say, given this is the stolen
podcast, that's the reality, right?
Like the promise of cryptocurrency.
Is this idea of cross-border valuetransfer at the speed of the internet.
Lawful users can now move funds fasterand in larger amounts than ever before.
We can send more moneyfaster for remittances right
(11:44):
back home to our families.
In Central America.
We can send larger amounts of fundsfaster for humanitarian aid that we can
now send at the speed of the internetfor dissident all across the world.
But who else likes to move money fasterin larger amounts than ever before?
Bad guys, scammers, ransomwareactors, North Korea, and that is
(12:05):
the paradox of cryptocurrency thatI know is very much a focus for
the work that, you and I both do.
Yeah, I was gonna ask you about that.
So I always, when I am stressing to localand state law enforcement that they need
to understand how to use the blockchain asan investigative tool and use tools like
TRM to expedite it and make it easier.
(12:25):
I always say that crypto is howbad guys are moving money, but
there's also decent people movingmoney on the blockchain as well.
It's not all illicitfunds on the blockchain.
Why do bad guys prefer to move money on?
Why is.
Yeah I think the reality is that, badguys will always be early adopters
of transformative technology.
(12:47):
When I was a prosecutor, andit was a while ago I started
like many years ago really.
We were first using pagers and then wewere using cell phones, and then we were
using end-to-end encrypted messagingapplications like Signal and Telegram.
I'm pretty sure the people usingthose end-to-end encrypting apps.
Basically us.
(13:07):
So law enforcement and criminals,mostly terrorist financiers
is, was at least my experience.
I now use end-to-end encrypted messagingapps to organize my kids' basketball team
who's bringing the oranges this week?
And the reality is it's really good tech.
There are people with internationalnumbers, people, especially in
DC, people all over the place.
And we're seeing thesame thing with crypto.
(13:28):
Blockchains allow you to send largeramounts of funds faster than ever before.
Bad guys are of us.
They wanna move.
And more cheaply, and that'swhy we're seeing this.
I will say that like I think universallyaccepted that it's still about 1% of
overall crypto volume is illicit, but that1% is what keeps you and I up at night.
(13:50):
It's really, where people arelosing their life savings.
It's, $1.5 billion hacks.
By North Korea that will fund weaponsproliferation and destabilizing activity.
So I think the reality is badguys are using everything.
They're using investment accounts,they're using networks of ALS and shell
companies and art diamonds, real estatebut they're also using crypto now, and
(14:10):
it's just part of that new toolbox.
What's that term Hawala mean to you?
A money transmitter.
I think of it as sort of broker.
Essentially many of the, like whenyou talk about specific Hawala, you're
talking about entities that maybe arein the Middle East or the Gulf region,
but to me it's actually much broaderthan that and just means , feels
more mom and pop than an exchange.
(14:31):
But someplace that often timeswill engage with Shell companies
or other type of actors where it'sa little easier to move funds.
Particularly if you walk inthe door with a brief case of
cash or something like that.
So it's been my experience with thevictims that I have been talking
to recently that they are beinginstructed to move their money from
their investment account to theirchecking account to a US based
(14:56):
exchange like Coinbase or crypto.com.
Gemini.
What does that mean when wetalk about a crypto exchange?
Sure.
Cryptocurrency exchange isessentially a bank that deals
cryptocurrency, some of the largestcrypto business, the cryptocurrency.
Finance is the largestcryptocurrency exchange on
(15:18):
Earth by 15 times or something.
Essentially, what they allow foris they allow customers to exchange
crypto for fiat and fiat for crypto.
So they're the on and off ramps todayinto that world of blockchains that we
were talking about a moment ago intothat world of networks of computers
where every transaction is logged and.
You need cryptocurrency exchangestoday because we still really
(15:41):
can't buy anything in crypto.
So we need to find those on-ramps, rightto buy and those off ramps ultimately
to sell so we could get fiat currency orcash that we could use in the real world.
Cryptocurrency exchanges are important,certainly for the issues that you
focus on, Erin, in terms of scamsand fraud, because victimes will need
to access those types of platforms.
(16:03):
To exchange their cash or fiatmoney, credit cards, essentially,
use your credit card to buyBitcoin, to buy stable coins, to buy
whatever they need on that platform.
Yeah.
And that leads right into mynext question, which is they are
usually instructed to buy USDTthese days, also known as Tether.
It's a stable coin.
(16:23):
Why is it that the bad guys arechoosing USDT or Tether or a stable.
Bad actors, like I, I say this allthe time because it's really true.
They're just like the rest of us.
They wanna move funds in with theleast amount of friction possible.
And the reality is like, youcan't go use Bitcoin today.
(16:45):
There's this famous story from anumber of years ago where someone
bought a pizza with a Bitcoin, right?
That pizza or 20 Bitcoin or something.
Now that pizza is worth millions ofdollars, multiple tens of millions
of dollars, you can go into yourlocal coffee shop and used Bitcoin.
So bad actors also don't want volatilityin their financial transactions.
(17:06):
So they're looking to stablecoins, which are pegged one to one
to the
US dollar when you're talkingabout Tether or USDT, same with
USDC, which is circles stablecoin.
Same with PayPal.
There are a whole bunch of differentstablecoin issuers and the reason for
using USDT is it is very available.
You can move in a bunch of differentblockchain networks that can
(17:28):
allow you to move funds faster.
And in larger amountsand more cheaply as well.
I think all of this tech someday willlook back on and say, Hey, we talked
about all the illicit activity on acertain blockchain or a certain asset.
And the re reality, you just look back.
It's because they, thosewere like the better, faster,
cheaper places to move funds.
That makes sense.
I'm gonna lead us down another pathand there's gonna be a lot that stems
(17:48):
from it, but what I'm curious about is.
When our victims are going into local lawenforcement these days, they're frequently
being told that the assets are overseasand there's nothing you can do about it.
And for three years, every time Ihear something like that, it makes
my head explode and it gives me anopportunity to educate about how
this is actually the benefit ofthings moving in cryptocurrencies
(18:10):
that we can see where it's going.
So can you explain that a little bitin a way that listeners can understand?
Yeah it's certainly another paradox.
What's so interesting is lawenforcement globally, every US federal
law enforcement agency, many stateand local, as you know, and then
globally, are using tools like TRM totrack and trace funds on blockchains.
And when I find blockchainfor you, hopefully decently.
(18:33):
I talked about it being a verifiable,immutable, traceable, trackable
public ledger, and that allows us totrace and track those transactions.
And crypto is borderless,but so are these tools.
So we're able to watch them.
The flow of funds cross through differentblockchains and different assets.
We're able to watch many fundsmove through what we call mixers,
which are a way to launder ortransactions on chain by bad actors.
(18:58):
They're also used by lawful users to allowfor some privacy in these transactions.
But I say all of that to say thatwe've gotten really good at tracing
transactions on blockchains.
Where we are less good today is continuingto follow those funds off chain.
And off chain is just the real world.
It's what we expect law enforcementglobally to be able to try.
(19:23):
Watch those transactions on a blockchain,but then ultimately be able to follow up.
Did these funds go into acrypto currency exchange.
Wherever that exchange is in theworld, we should use every tool in our
toolbox to reach those funds, whetherit's diplomatic pressure, whether it
potentially sanctions, if it's illicit,if it's an illicit actor or a bad actor,
(19:44):
or whether it's legal process from theUS to a lawful cryptocurrency exchange.
The best case scenario, Erin, andthe best case scenario happens
more often than you think.
Is that the funds go to a largecompliant cryptocurrency exchange where
law enforcement can serve a subpoena.
And the reason they serve asubpoena is that's where you get
to know your customer information.
(20:04):
You can know who's behind anaddress, and then they can
ultimately start to investigate.
As you know, as a prosecutor, I don't haveto tell you, the next thing you do is not
say, all right, what's happening on chain?
Let's get into TRM.
You don't, you say, alright, how canI investigate this case off chain?
And you serve a subpoena.
Now that you have the information youserve a subpoena on a or a search warrant
(20:25):
on Google for their Gmail records,or Microsoft for Hotmail records or
Outlook, you then go to their cell phonecarrier and say, Hey, I wanna see all
the cell tower data on this person.
You maybe execute a search warrant whereyou might find different types of things.
One of the nice things about crypto toois there's a lot of cooperation across
border that might not involve the sortof archaic mutual legal assistance
(20:48):
treaties and other types of tools thatwe have always used as prosecutors which
are slow and laborious a lot of times.
There's really good publicprivate partnerships.
There's a lot of cooperation.
I think there's a lot to do.
I think you're gonna dig into a lot moreof the things that we could be doing.
There's so many answers to questionand excited where you're taking it.
(21:09):
I would say that I think things havechanged dramatically since I first
started doing these investigations.
My, when I say I, let's be clear, I wasworking with an elite task force of local
and state, primarily local investigatorswho knew how to trace cryptocurrency
early because we had some experience withcryptocurrency back with SIM swappers.
(21:31):
And what we found, we went with awhat if we could attitude about this
that we saw when we got our FI firstpig butchering case and saw that
it went to Binance back in 2022.
We didn't know how cooperative ornot cooperative Binance would be, and
we were delighted to see that eventhough Binance was located outside the
(21:52):
United States, they were willing to.
Ultimately give back that money thathad been stolen from the victims, that
we could get it back to the victim.
But I also remember when we starteddoing this more and more in 22 and 23,
there were certain exchanges where we'dsay, oh, well they're not gonna respond.
They're not gonna respond.
And what I've seen as we'vemoved forward is that more and
(22:14):
more are becoming compliant.
Has that been your experience?
Absolutely.
I mean the early days did feellike there were a handful that just
no man's land where you weren't gonnaget response to any type of process.
I think that's much less so truetoday, and I think that most vast
virtual asset service providers at theFinancial Action Task force likes to call
(22:35):
essentially cryptocurrency exchanges.
Now, their crypto businesses have builtout pretty robust compliance functions.
They're all using TRM.
Compliance professionals.
And they're really monitoring and they'reresponding to law enforcement subpoena.
They have policies and proceduresin place, and I think some
of it is, look, regulation isbecoming more and more global.
There's certainly now standardsacross so many jurisdictions when
(22:57):
it comes to anti-money laundering.
So regulators, whether it's27 member states in Europe,
whether it's in the states.
Cryptocurrency have compliance control in,and now that isn't to say there is not.
(23:18):
I famously, a couple years ago onTRM Talks, which is my podcast or
our podcast, interviewed Todd Conlin,who is a super senior official at the
US Treasury Department at the time.
And he used this term, and I'vestolen it so many times, but I'm
gonna give him credit because thisis high profile stuff right now.
Erin he said there's an illicitunderbelly of the cryptocurrency
ecosystem and that still exists.
(23:39):
Noncompliant cryptocurrency,many of been sanction by
the U.S. Treasury Department.
Suex, Chatex, Garantex, Bitzloto.
The list goes on and on.
Huione is a essentially a exchangeror series of different services that
have allowed for a number of differentmoney laundering groups, whether
(24:00):
it's North Korea funds, whether it'sscams or pig booking funds was just
essentially sanctioned in by sen, whichis the anti-money laundering regulator.
You're skipping ahead and I love it.
Let's go to, I'm so sorry.
We're rock and roll.
No, let's go to way one, let's go way one.
So I'll stop there.
Before we do, so my point is,there's still this illicit underbelly
and if, and people ask me allthe time, where are the gaps?
(24:21):
Like, where are the gapsthat we're seeing in this?
And they're those places.
And we need to use every toolin the toolbox, go after them.
And fin from the US Treasury Departmentused one of those tools this week.
And I know Erin, you and I were bothreally happy to see that we were ecstatic
and that whole concept of use, every toolin the toolbox is something that we've
both been talking about for a long time.
(24:42):
That, my focus is on transnationalorganized crime and the scamming that
they're doing, taking billions andbillions of dollars from all over the
world and human trafficking as part of it.
And there's no one way thatwe're going to stop this.
It isn't going to just be conquered bylaw enforcement alone, or banking alone,
(25:03):
or social media alone, but that we shouldbe using every tool in our arsenal.
And the Huione takedown or at leastthe mentioned by FinCEN is a huge deal.
And I'd love you to explain in clearlanguage what that means and why this
relates exactly to pig butchering.
Absolutely.
Before we get there, I'll tell you,I was on the phone this morning with
(25:25):
Jake Sims, who is a good friend ofmine and a Cambodian country expert,
and he said, we've gotta talk.
Huione.
And I thought, he said Huione.
And I was like, we did win.
Like this is a big win for people whodon't like transnational organized crime.
So go ahead.
(25:46):
Erin really,
What are the tools, right?
We know that we're good at tracingcryptocurrency transactions and we
can trace and track stolen funds.
But what are the other tools that wecan use to take out these criminal
organizations that are engaged inthis scam activity at scale, pig
butchering at scale human trafficking.
(26:07):
At scale, how do we use other tools?
And I think sanctions issomething that you and I have
talked about for a long time.
How can OFAC, the Office of ForeignAsset Control, the US Treasury
Department implement sanctions?
How can FinCEN, which is theFinancial Intelligence Unit at
the US Treasury Department, theFinancial Crimes Enforcement
Network, what tools do they have?
And this week, FinCEN used a very specificSection three 11 of the Patriot Act.
(26:32):
And went after Huione, which is reallya financial conduit for a broad range
of cyber enabled criminal activity,which includes pig butchering scams,
transnational fraud networks, and thetypes of hacks committed by North Korea.
FinCEN found that between 2021 and thisyear Huione laundered about 4 billion
(26:56):
illicit proceeds, including including morethan 37 million linked to North Korea.
36 million stemming from scam activity.
Our numbers at TRM arehonestly higher than that.
I think I'm breaking some news rightnow 'cause I don't know that I've
shared this with anybody else, but wejust pulled some data that said in 2024
we found that at least 120 million inexposure to Huione from scams close
(27:19):
to 80%, of which we have evidence thatthat specific scam was pig butchering.
This is.
Money laundering at scale forthe very worst cyber criminals
and scammers in the world.
So what is a three 11under the Patriot Act?
Basically, it allows for FinCENto take one of five different
actions against an entity.
(27:41):
It could be anything from increasedreporting requirements for US
financial institutions, all the way to.
requiring US financial institutionsto block the entity from engaging
with the US financial system.
It's essentially the equivalentof the death penalty or a foreign
financial institution, and that waswhat FinCen is recommending for Huione.
(28:04):
So we'll see.
Ultimately, there's a notice ofproposed rulemaking asking for that.
It feels not that controversial to me.
So hopeful that will beultimately what happens here.
But there are other tools.
If this is anything, it reallyshows, I believe that the US Treasury
Department where, I worked and havereally good relationships with really
the, some of the best subject matterexperts in the space are focused
(28:26):
on using every tool in the toolbox.
So, yeah.
I think it's a cool moment.
It's early.
There's a lot of other tools wecan use and interested to see like
where else we deploy authorities.
Yeah, I loved hearing it because itwas one of the first big moves by the
US government against transnationalorganized scammers like this.
(28:49):
And I was recently in Cambodia and I cantell you that there's a new road that
constructed by China that goes from PhnomPhen down to Sihanoukville where a lot
of this illicit activity is going on.
And at every
overpass, there is an ad for Huione.
It's very much the Cambodianfinancial business.
And to eliminate their access to or toat least recommend the elimination of
(29:14):
their access to the American bankingsystem is a huge, huge deal and I'm
super impressed and really glad thatwe find ourselves here in May 2025.
We're making positive movement.
Absolutely.
Time now for a quick breakto thank our sponsors.
(29:35):
Hey friends, I just wanna thank TRM Labs,our first ever sponsor of the podcast.
I love their message.
They're building a safer financialsystem for billions of people.
And that's exactly what weare trying to do as well.
Create a safer situation for peoplewho are going about their daily lives
(29:55):
and engaging with digital media.
But I wanna take you back.
We sidetracked on who, which I wantedto get there anyway, but I. Some of the
ways that TRM has specifically been ableto help state and local law enforcement,
and that was in that if we're askingstate and local law enforcement to
(30:17):
embrace an entirely new way of doinginvestigation, they're gonna need tools
and they're going to need training.
And so I wanna talk to you a little bitabout what I've, what TRM specifically
did for this crypto coalition that.
When I say I, let's be clear againthat a group of investigators.
(30:44):
Awarded state and local individuallaw enforcement agencies a
number of licenses to your tool.
Why did you do that?
Thank you for bringing that up.
And I really, as you and I have talkedprivately, I'm so hopeful that we'll
be able to do more like this together.
And I know we will so many of us at TRMfrom Esteban Castano, who is out CEO.
(31:06):
To quite frankly all the formerU.S. and global law enforcement
folks that been hired there.
Christian Cheski, and Kyle Armstrong,
and Sujit Raman, and Nick Carlsen.
And just really across, PhilArris from the UK law enforcement.
And so many others.
We went to TRM for this mission.
Really exactly the reason you left thegovernment to go to Shamrock full time,
and that is you felt like you couldhave an impact at scale in a way that
(31:29):
you just can't when you're doing theindividual cases day in and day out.
Rita Martin talks about this all thetime from former Secret Service at TRM,
Taylor Windemouth who leads our training.
If you look around our company,it's like, none of these people
left the government for the money.
We left because really we werealigned to a mission, and I think
that Esteban and Rahul Raina, whoco-founders like to their credit, are
(31:51):
just so aligned with that mission.
So this idea of, Hey, let's give licensesto jurisdictions that don't have the
resources, but really need this to learn.
This stuff just felt really alignedto that mission to build a safer
financial system, and we're alwayslooking for ways to do more like that.
One of the next crazy ideas I hadafter, would you please give some
licenses to local and state, was Ireally wanted a place where any victim
(32:15):
in the United States, no matter wherethey were located, could make a report
and have a qualified investigator takea look at that report in real time.
And TRM helped us build that with theOperation Shamrock portal to chain abuse.
Tell me a little bit about whyyou built chain abuse and how this
Operation Shamrock Portal works.
I'd say there's a number ofdifferent reasons why chain abuse
(32:40):
and it was really like we lookedaround and said how can this
industry do more on its own.
Right?
How can we do more withoutregulators, without government?
And the idea was that because of thosenative qualities of public blockchains
that I was talking about earlier,they're transparent, they're immutable.
We can actually take, if youhave addresses then investigators
can dive right in and be able toinvestigate whether they're folks
(33:03):
who are TRM, whether there arefolks who are in law enforcement.
So it was TRM led, but thisis some of the largest.
Businesses in the Uniswap and Circleand Binance all were part of, and
are part of today of chain abuse.
So what is it?
It's the largest reportingdatabase of scams and fraud
within the crypto ecosystem.
(33:23):
We've had a million plus reports in thelast just two years, been in existence.
It's a place where if you are a victimor you see a scam you can alert.
other people who are part ofthis chain abuse community.
And you also alert lawenforcement through the portal.
And we were running thisfor a number of years.
I think it became a really goodresource for law enforcement and
for also individuals in the space.
(33:46):
It just became so obviousthat it was something so cool.
I think that we always arelooking for ways to partner
with you and what your building.
And
I think what you have an incrediblenetwork of state and local
law enforcement, but alsovictims and people who are very
engaged with what you're doing.
And we wanted to build a portalthat could directly engage with
(34:07):
chain abuse for Operation Shamrock.
And to be clear about it, if you go tothe operation shamrock org website, if
you're a victim and you click on filea report, it will take you directly
to this site, this chain abuse TRMsite, where one of our investigators
will get that and be able to.
Be able to at least.
What I always wanted for victims wassomeone to just be honest with them
(34:29):
about whether there was anythingthat could be done or whether
really things had been exhausted.
And that's what you will get isyou'll get someone who will look at
it, who knows what they're doing, andthey will tell you the truth whether
you like it or don't like it, butat least you will have an answer.
I think that's what's been lacking forso long, for so many victims in the
United States that didn't know whathelpless and didn't feel like they
(34:54):
had a place that they could trust.
And one thing just to say, becausethis is such an extraordinary
platform and you have such an amazingfollowing, that like the more ears
that this can reach the better.
Chain abuse is not a recovery.
Yes, we do offer recover services.
You cannot get recoveryhelp through our platform.
We are a reporting database.
So when you are on the OperationShamrock site and you go to chain
(35:15):
abuse, you are there just to reportanyone who is reaching out to you
saying that they're chain abuse.
Saying that they're Ari Redbord sayingthat they're Christian Cheski saying that
they're Erin West saying that they dorecovery services, they're chain abuse
recovery Gmail, they're a chain abuse.
These, this not real chain abuseand they are there to revictimize
(35:38):
victims of victims, pig butcheringand other types of crime.
And it's just something that wereally need to get the word out on.
Maybe this could be a socialclip for you, Erin, so we can
like I'm definitely using it.
We have really, so we couldget more people to see this.
'cause it breaks ourhearts, it breaks our heart.
And I love being a partner with youon this because like I feel you and I
(35:58):
could uniquely utilize these platformsto make sure that people aren't.
That people aren't getting
the services that they need.
Without revictimized here, it's oneof the worst parts of all of this.
It all breaks my heart.
I think there's nothing worse thanthat because maybe it like goes to our
core business and what we do, right?
Trying to stop bad actors and peopleimpersonating us or chain abuse or you,
(36:19):
there's just nothing that makes me madder.
It really does make us mad.
Thank you for bringing that up.
Speaking of reporting platforms, the FBI's
IC3 report.
I was not at all surprisedand in fact I thought that the
numbers might even be lower thanI thought they were going to be.
(36:41):
The numbers I always look at are,number one, I always look to see where
California is located in the States, andI am really disappointed to see that we
continue to be number one and number oneby a long shot in terms of complaints
with cryptocurrency related theft.
Amount lost in cryptocurrency relatedthefts, but the numbers that matter to me
(37:04):
are when we break it down by crime type.
And we see investment scamat the top of the list.
In 2023, it was 4.5 billion.
This year it's almost 6.5billion, and that's a jump of 44%.
And I'm wondering what stood outto you about crime types when you
(37:25):
looked at that IC three report.
A couple things.
I wanna make sure I have my numbersright, so I apologize for this.
No, I'm, glad you're checking.
I think mine are right but ya.
Yours are right for the report, but Ihave some numbers that we juxtapose.
So I'm just gonna kind of jump in here.
Ya look, I think the report is excellent.
It usually is, and I think it's a reallygood baseline to really understand what
(37:47):
are the threats, what are the typologies?
And then I do agree, we always take areally hard look at the states to see
which ones we really should be focused on.
Just to give you like a littlesome, a few data points, the TRM
labs, our 2025 crypto crime reportis actually pretty consistent.
Essentially reinforces a lot of thetrends that you're reading about in the.
We identified about 10.7 billionin crypto funds sent to fraudulent
(38:12):
schemes with pig butchering, again,being the largest piece of that.
We saw about 5.8 billion in pigbutchering related scams in 2024.
Essentially the same periodthat the I CT report comes out.
One thing that's really important,and I believe it says in says.
(38:32):
Sort of conventional wisdom or the numberI see out there, you probably see this
more Erin, so you might chime in here.
Only about 15% of victims of pigbutchering and other scams even report.
So if you're seeing an $11 million I'msorry, $11 billion, $12 billion number,
you could probably multiply that by 15.
I'm sorry.
I was like, that's a lot.
(38:52):
But yeah, I'm sorry.
You could probably multiply thatby another, assume that that's only
about 15% of the total volume here.
It's significantly, significantly higher.
I think that's a really important part forpeople to understand as they're doing it.
We're talking this a multi hundred billionproblem that we're seeing here in the.
I really think it's importantto put numbers on this, and
(39:13):
I'm so glad that IC three did.
I think that their trends are spot on.
Yeah.
Their trends are definitely spot onand to me, what is alarming and what
continues to keep me up at night isthe percentage increase of a certain
crime type, and that takes us back towhat FIN is doing, and that is that
we need to put more tools on this andwe need to recognize the alarming.
(39:36):
Criminal behavior, I will say.
And it's early in this administrationand where we're going in the us but in
talking to law enforcement, really acrossthe United States and really globally
as well, there has been a shift andalso I'd say that the shift in the way
we're building A TRM also, and beforeit was tracing individual cases, Hey,
(39:57):
I wanna follow these specific funds andunderstand where to network understanding.
How operate.
I think that's becoming more important.
That's something thatwe're thinking a lot.
A lot of the reason we're using AI atscale now in the tool is to understand
(40:17):
patterns and networks better, butthat's what law enforcement is doing.
And this Huione today or yesterday wascertainly about this one entity and
it was certainly about Cambodia, buthonestly it was about much, much more.
And that is understand what are.
And I think we're gonnasee a lot more of that.
(40:39):
You and I have talked about thisidea of all roads lead to China.
We've been able to identify online,link on chain links between North Korea
cyber criminals and some of these pigbutchering operations to understand who
are the money laundering networks thatare supporting them, the Chinese money
laundering organizations, the Chinese.
I say all that to say that I do thinkwe're moving in the right direction.
(41:01):
This is an example.
But we have to do, there's a lotmore we can do and I certainly have
some thoughts about some of the otherthings that we could do as well.
Do you wanna jump to that or as I,I was gonna take, I was gonna save
that for the end, and I was gonnatake you in a different direction.
And I'm the boss, so I'm gonnatake an end a different direction.
Take me in a different direction.
Let's go.
You're such, oh my God,you're so the boss.
Nothing more true has ever been said.
(41:28):
Time now for a quick breakto thank our sponsors.
Thank you so much to our sponsor.
TRM, if you don't know what they do, TRMand its blockchain analytics capability is
what makes it possible for law enforcementto be able to trace these funds back
to the bad actors and recover them.
(41:49):
We couldn't do the work wedo for victims without TR.
M Labs.
So I'm so grateful that theydecided to sponsor our podcast.
So one of the things I like a lotabout you is obvious to me when I
think about the TRM Running Club.
So what can you tell me aboutthe TRM Running Club and then I'm
(42:10):
gonna tell you why I think theTRM Running Club is so important.
Wow.
I love that.
I can't wait to hearwhy it's so important.
The TRM running club is totally, my babyTRM is a little, my baby T RM running club
is just like, I pinch myself sometimes.
It started out, basically I'm a runner.
My wife Kelly got me into running, Idunno, 20 years ago and I haven't stopped.
Mostly it's chasing her around 'causeshe is a much better runner than I am.
(42:34):
But we're trying to run amarathon in every state.
So I'm training and I travel a
somewhere in.
I would usually, have a couple drinksand probably eat a big meal, and the
next day I would just wanna snooze.
But I started inviting people to runwith me in cities around the world,
and two people would show up in Parisand it really became a forcing function
(42:57):
for me to get up in the morning.
If you tell the entire internetto meet you at your hotel in
London, you have to make sure.
All of a sudden last year in AustinConsensus, which is the largest crypto
conference in the world, reachedout and asked to make an official
event, and that was really special.
So we had about 75 people show up inAustin, and it's taken off since then.
(43:18):
It's been an official event of prettymuch all of the, or many of the major
crypto and compliance conferencesjust got back from Hollywood, Florida.
It.
Singapore FinTech Festival.
We have a group going at 0.0forum in Zurich next week.
(43:38):
The following week, we're back asanother official event of consensus.
So it's just so crazy.
I'll tell you a funny story thatI, I don't think I've ever told.
Certainly not publicly.
At Consensus last year.
I was there early.
I always bring hats.
Everyone who runs with gets a specialTRM, Nike hat and setting stuff.
Bought some Gatorades Professional usual.
(44:02):
Maybe 20 minutes earlier.
So he says, wow.
So you go around the world organizing,running clubs for conferences.
And I said, wow, that job ismaybe cooler than the one I have.
Maybe that is what I should do.
That's what Kevin West should do.
Oh, actually put him on that age21, put him to work, but really
(44:22):
become a special thing and.
Really interesting stuff, whether it'scrypto stuff, whether it's compliance,
whether it's law enforcement.
There's no other running club inthe world where you have a bunch
of crypto bros running with FBII agents and state and locals.
Exactly.
And state and locals.
It's a really neat thing.
(44:43):
So thanks for asking the question.
I don't think I've ever been askedabout TRM Running club on a podcast
before, so that's pretty cool.
I'm glad that you appreciatedit because TRM Running Club.
That we can make major change when webuild communities and when we build
communities, especially a communitylike a running club community where
you have to do hard work together.
(45:03):
That may not be hard work for you,but for most runners, it is hard work.
And I think that you create a differentlevel of familiarity and with people when
you have done something difficult with.
We know on at conferences that whenwe go and do other events with them,
it's good because we get to knowpeople better on a different level.
But I think that the TRM Running Clubis a really good way to build those
(45:26):
relationships that are the relationshipsthat matter when you are trying to
fix something that seems unfixable.
Yeah.
For, I know this is a podcast,so it's only on audio, but.
The reason I do have the coolest jobin the world is I get to do stuff like
this and with people like you, Erin.
(45:47):
So it's, yeah, it's really cool.
And the conversations outthere in these like beautiful
places are absolutely amazing.
And some of it's about crypto,some of it is about illicit
finance and stopping bad guys.
But I'll tell you, a lot of it isabout people's kids and their families
and like where they're traveling to.
How hard travel is on familiesand it's the ultimate in community
(46:07):
building and I appreciate you sayingthat, like more than anything.
Oh, good.
Yeah, no, I'm impressed with you.
I think that's how we make change.
I know I've been talking to you for almostan hour and I have literally, I've got a
whole bunch more questions for you, butso where, how do you think if you had to
find one, I don't wanna ask it that waybecause I don't wanna ask you one tool
because I, that's not a helpful question.
(46:28):
I wanna know, if you had a chanceto put a lot more emphasis in one
area right now that you think would reallybe disruptive to transnational organized
crime, what do you think that would be?
It's going after China usingevery tool in the toolbox.
I know this administration isfocused on that, and I think
that's a very good thing.
We have written about how all roadslead to China when it comes to
(46:51):
money laundering and Chinese moneylaundering organizations, triads,
criminal networks, gangs, are laundering
scam procedes, pig butchering proceeds.
They are launderingNorth Korea hack funds.
They're laundering money for cartels.
We've written a fair amount about this,but are gonna continue to write more.
So I think it's using every tool in thetoolbox and obviously crypto tracing
(47:15):
and investigations is part of that.
So are sanctions, I've mentioned thisbefore, but when I was a prosecutor
I worked with on a team with Zia,who's now a federal judge, and Nick
Carlson, who's atm and Kyle Armstrong.
And.
It's the only time it's ever beendone and still no one's done it again.
(47:37):
The idea of it is that the US mightnot have jurisdiction over that
bank, but if it doesn't providerecords, the US can cut off.
Its correspondent banking, whichis essentially a death penalty.
And ultimately after some litigation, thebank implied how much did they provide?
Not sure, but it was something,and the reality is we can
use these types of tools.
(47:58):
We can cut off correspondentbanking to a small Chinese bank.
We could use offensive cybertools to go after bad actors.
We just designated Cartels as foreignterrorist organizations and they're, and
there are way that opens up a whole bunchof Department of Defense operational
(48:19):
tools now that exist in that realm.
It's just important to know, and wedon't have all of those things and
certainly not all of those things at once.
But it's important to know that there aretools at our disposal and we can use them.
I'm looking forward to what the NationalSecurity Council, treasury Department,
the State Department, the DOD, theintelligence community, where they
(48:40):
ultimately land on how to use these tools.
You said a couple of importantthings there, and one of
them was we have these tools.
The second thing you told me whenyou rattled off those names that
are big heroes to those of us inthis industry who follow this.
You were at a what if we could moment.
Nobody had served a subpoena on a Chinesebank before and you chose to do the
(49:02):
hard thing, and so how do we encouragepeople to be more innovative and more
creative and more willing to step out alittle bit from what's always been done?
We need more Zia Faruquis in theworld, to be honest with you.
He was the prosecutor I'veseen in still this day.
He would up all night and dothings because it was right.
(49:24):
This was totally one of thosecrazy, smart, aggressive
moves that only he would do.
And I was lucky to be a part of it.
And I think that any, all of us whowere part of that, I'll never forget it.
I'll never forget sitting down withJesse Lou, who was the US attorney,
for the District of Columbia at thetime and convincing her to do this.
(49:45):
To reach out to the AttorneyGeneral of the United States to
reach out to the Treasury secretarywho had to approve us doing this.
You need more Jesse l in theworld, people who are leaders who
basically support their people.
I think you and I are all aboutcommunity and all about the people.
At the end of the day, we need to ensurethat there are more people who are
willing to do things that might seemcrazy or aggressive in the moment but
(50:10):
are the right thing to do ultimately.
I couldn't agree more.
I think that is how we move the ball.
That is how we make things justa little bit better every day.
The way we've always done thingsisn't going to work in this
new place we find ourselves.
So it's important to think of differentways to do it and to be willing
to test limits when it's right.
And I think that was a reallyimportant thing of what you said
(50:32):
is you named people who did thingsbecause it was the right thing to do.
So I appreciate that.
As we're leaving, one of the thingsthat state and local law enforcement
need more than anything besides tools istraining and TRM has started bootcamps
where you are out in, you're out inthe woods with us doing training.
Tell me how that's going.
You've already been to San Francisco,you've already been to California.
(50:54):
It looks like you're going to Denver.
You've got other cities on the, tellme what was the impetus for this?
Yeah, it's really cool.
And it's very Erin West, honestly.
It's just like, what if we couldtype of thing and it's like we have
a really cool TRM Academy, which isour training platform, and we're often
doing presentations at conferences andother things, and this is like, Hey,
how do we just get on the road and openthis up to anyone who need this type
(51:19):
of training and capability training?
And it's tool agnostic.
It's how do you do crypto investigations?
You mentioned all those cities,and it's like, I feel like it's
a rock and roll tour where you'rejust like, I want the t-shirt.
You need shirts.
I don't know.
I don't think we've made the shirt.
All the tour dates need.
Mm-hmm.
Yeah.
I was in New York last week.
Last week, yep.
With Karma Armstrong and MichaelPavlik and Patrick South, and folks
(51:39):
who were leading that training.
I was just watchingFanboying, what Michael
and Tom were doing in particular.
And I know you know and love Tom.
I do.
It was awesome to see the response.
They're fun.
We had a happy hour afterwards.
What is it?
Go for the training, stay forthe happy hour kind of thing.
You build community.
You build community andit is really important.
(51:59):
Yeah, and the conversations wereawesome and it was a mix of, there
were regulators in there, therewas law enforcement in there and
there was private sector in there.
It's a really neat thing and I reallyappreciate you asking about it.
It's us just trying to get out thereit a way where people can engage.
We are in a world wherebudgets are tighter than ever.
And to the extent that we can go towhere people are I think it can me
(52:21):
more meaningful and useful than ever..
It also brings people of their owncommunity together where sometimes you
don't know the regulators in your area.
Sometimes you don't know the industry,the law enforcement in your area.
I think it's great opportunity to bringtogether the people in your neighborhood.
Ari, it's a pleasure to beassociated with someone who does
the right thing and who works witha team that does the right thing.
(52:43):
And I'm super grateful for yoursponsorship of this podcast, but I'm
even more grateful for you spendingan hour with me on a Friday night.
So Friday evening, it's a beautiful,it's a beautiful afternoon
in California, so thank you.
It's beautiful here in DC too.
You could probably just seethe sun shining through my
window here in Georgetown.
Erin, again, your relationship, ourrelationship is one of the great things
(53:05):
about my career and I'm so grateful.
And when you told me you were doingthis podcast, it was like, wow.
Yet another thing that you're buildingand building is hard, but you've done this
really extraordinary thing and I know it'sgonna, get, just get bigger and bigger.
I mean, you're like a correspondent now.
You're like a journalist..
(53:26):
Your on the scene of like warzones and all over the world.
You are a prosecutor and a communitybuilder, and now you're like a on location
journalist and now you have a podcast.
I don't know, like whatare we gonna do next?
Reality show.
I'm mission focused Ari.
I'm gonna use everything in my arsenal.
Thanks again for being here today,and thanks friends for tuning in.
I'm so glad that you spent some time withus and I hope that we were able to break
(53:49):
down some of this into usable chunksthat are meaningful to you and help you
understand how this bad activity is beingdone and what's being done about it.
Well I look forward toa part of all of it.
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