Main Takeaways

  • Crossing the Chain is a new podcast by Binance focusing on the latest developments in global policy and regulation of the digital-asset space. Episode two, Digital Sleuths: The Collective Fight Against Crypto Crime, highlights the importance of collaboration between crypto platforms like Binance, law enforcement, and regulators to effectively combat various forms of digital assets-related crime and protect users.

  • The episode featured two outstanding crime fighters: Erin West, a deputy district attorney in Santa Clara County, California, and Erin Fracolli, Global Head of Intelligence and Investigations at Binance. Centering on common online scams, particularly the scheme known as “pig butchering,” the discussion emphasized various strategies of educating users and law enforcement agents, recovering funds for victims, and breaking up organized scam networks.

  • It is essential for users to be cautious and thoroughly investigate all online investment opportunities, especially promoted by strangers, resist high-pressure tactics from potential scammers, and maintain trust in the continued efforts of industry players and law enforcement to secure the crypto space.

The second episode of the Crossing the Chain podcast focuses on the digital-asset industry working together with law enforcement to prevent bad actors from accessing and abusing the crypto space. Guests Erin West, deputy district attorney in Santa Clara County in California, and Erin Fracolli, Global Head of Intelligence and Investigations at Binance, shared their insights and experiences in combating digital financial crime. Watch the episode in full here or keep reading for a summary of the discussion.

Crossing the Chain: Crypto Policy Podcast. EP02, Digital Sleuths: The Collective Fight Against Crypto Crime.

Erin West, a prosecutor for Santa Clara County's elite high-tech investigative force REACT, resolved to fight crypto-related crime when she realized its massive potential for victimization: people can lose their entire net worth overnight without realizing what happened. The prevalence of misinformation about crypto, especially in its early years, has exacerbated the threat that criminals who utilize digital assets toward their nefarious ends posed to the public. Blockchain technology, however, presents a unique advantage: its traceability enables the recovery of funds.

Erin Fracolli mentioned that scams have become one of the major threats that Binance’s investigations team deals with daily. As this type of crime is becoming prevalent, there is no typical victim demographic: all users have a chance of being affected by criminals’ efforts to strip them of their money. Binance has prioritized working with law enforcement and other actors in the space to address these challenges.

West spearheads an initiative called Operation Shamrock to combat "pig butchering" scams, a multi-billion dollar criminal business originating from Southeast Asia. Pig butchering is a sophisticated scam that involves criminals reaching out to their victims online, building a relationship, impressing them with their allegedly lavish lifestyle, and then inviting victims to fake but often very professional-looking investment platforms. Once the victims invest, the scammers tighten their grip by showing alleged gains on the platform’s interface, after which they often ask victims to pay additional funds as "taxes" to enable withdrawal.

I personally like the term because I think it carries a punch. When you hear it, you think: “What is that? I wanna know more about it. That is exactly the punch that we need to have with a scam that is this pervasive and this destructive. – Erin West, deputy district attorney in Santa Clara County, California, and prosecutor for REACT investigative force

To counter these scams, West and her team developed a three-prong strategy: education, seizure, and disruption. They started with educational webinars for local, state, federal, and international investigators on dealing with such scam cases. Binance and other centralized crypto platforms have been cooperating extensively with law enforcement, including the REACT task force, to increase success in the recovery of funds and the tackling of organized scam networks.

Advice for Scam Victims

Scam victims, West and Fracolli explained, should report criminal incidents as soon as possible to law enforcement and Binance, if their Binance accounts have been involved. They should also be wary of third-party recovery services, which can do little to recover stolen funds or can even be scammers themselves.

Law enforcement practice goes against a popular misconception that, if your money goes overseas as a result of a scam, it is no longer recoverable. It is not true thanks to the collaboration of Binance and other players in the crypto space. To illustrate, Binance responded to more than 47,000 law enforcement requests in 2022 alone.

West mentioned that regulators can help mitigate risks associated with online scams, particularly by making advances in the online identity identification domain. However, the first line of defense is the users themselves. People should always closely examine any online investment opportunity they encounter and not let anyone pressure them into making quick decisions.

The key takeaway from this episode is the importance of collaboration between industry players like Binance, law enforcement, and regulators to ensure that the digital asset space remains safe and secure for its users. The successful efforts against crypto crime demonstrate that such a collaboration can make a substantial impact.

Further Reading

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