CVA Podcast: Lance Morginn, Blockchain Intelligence Group

Transcript

[Music] hello hello and welcome to the first edition of the Krypto Valley Association podcast exciting times ahead as we embark on this journey to discover the latest trends within this fast-moving industry and try to shed some light on the mysteries it contains today we have Lance Morgan with us president of blockchain intelligence group who will tell us what it's like to be the James Bond of crypto as we dive into this hidden world of blockchain forensics investigation so Lance tell us what's going on behind cryptocurrency well thanks Russ thanks

for having me and there's there's definitely a lot going on been in the space now for five and a half years and it began with providing insight to transactional information within different cryptocurrencies and you know we started off recognizing that that this space from a data perspective is growing over ten minutes when referring to Bitcoin and every two to three when referring to others and even even shorter time frames for some others so we felt that search and analytics were a necessity and in order to help bring cryptocurrencies mainstream we needed to

be able to give the tools to law enforcement to their traditional jobs in this new form of currency be able to give confidence to regulators to be able to understand and create policy and to be able to give confidence to the financial industry that they can meet their regulatory requirements behind the licenses that they hold and and so when we first announced the ability to visualize or see transactions law enforcement was our biggest respondent and so this is where we built our product called clue and this is an engine that allows you to view

transactions all the way back to the very first transaction in 2010 and and from there we provide attribution to entities and activities that exist within the crypto space so be it a mixing website be it transacting with the dark web be it offering services that might be around child exploitation or terrorism financing and so we provide insight and identifying choke points that exists within this ecosystem that allow law enforcement to be able to go and subpoena the KYC

information from that vast and therefore D anonymize the pseudo anonymous people and we realize that that having this ability allows to try to catch these nefarious actors and to try to empower the overall and remove sort of the initial negative assessment that people had around crypto you know it's used by criminals it's all for criminals and thief and the reality is that that in the early days that was the case but as time went on you know adoption and on-ramps were becoming easier and people

are becoming more aware of of crypto and therefore that percentage is decreasing over time but it'll it'll always be there I mean the the biggest form of money laundering to date is still cash and we we at least try to progress the overall objective of what the initial idea from Satoshi was and that is to offer further transparency around transactions now you know the Liberty libertarians of the world will say that that's not the objective and really it's just about having a decentralized

money system but the reality is that you know really it's to make sure the it's all stored in an immutable ledger that is is open to everyone for everyone to see and so our skills is to be able to give visibility into that transactional system in an easier fashion mhm yeah and I really believe that these insights are evermore more important right within growing industry like like the one one we're in that is that is going growing by the day providing these insights just a fundamental use and so wouldn't wait tell us a little bit more about what blockchain intelligence group is

currently doing and when what role you play within within this growing industry yeah thank you so as we progressed we realized that we have the data to be able to deliver solutions for the financial industry so we've risk scored a number of different Kryptos allow a finance organization to kind of liken Equifax or Trans Union or dun & bradstreet would be another example where you can submit an address or a transaction and get a risk score back with flags and entities attached to it to allow a compliance officer or anyone for that matter field to understand why it's scored that at that level and determine if it's within their

risk tolerance tolerance so we from that point realized that the industry required education and I stole the head of Homeland Security's illicit finance and proceeds of crime unit so he was the supervisor special agent in charge of all crypto currency investigations in the US government and had traveled the globe traveling foreign law enforcement sees on how the u.s. performs cryptocurrency investigations and and then I also had Theresa who's 25 years in the financial industry helos down 1,500 banks in the 2008 meltdown on a 16 billion was the largest bank she closed and collectively the two

of them created our crypto investigator training program and it is a self-paced educational system that allows people to get an understanding of the different types of cryptos the ultra private cryptocurrencies the different types of wallets that exist how the dark web operates and then how the criminal element takes advantage of the an amenity that the crypto can offer and and allow people to understand how they can investigate transactions so that they can realize the information that they need to be able to perform their job so we've had some amazing successes

we've had JP Morgan Morgan Stanley Wells Fargo you know some amazing organizations and members have gone through our training and great feedback and then we also have a forensics division you can has there's certain times where agencies are overwhelmed or they don't have the expertise or law firms require a third party unbiased review or even vast themselves that come to us to help them defend their side of what's transpired in losses and as a matter of fact recently we are now recognized at the federal level as expert witness testimony providers and

we've done cases for the very first case in Hong Kong 1000 Bitcoin were stolen that's gone to trial there was a an ICO that went astray over in Germany that we helped provide evidence or so it's pretty interesting and of course a lot of individuals that come to us that have had gaps and they would like to help he provided evidence trail to law enforcement to try to go and capture whatever funds might be left and so we've definitely the James Bond side of things definitely plays out there she can't and then lastly we created a product or service that is really our

our way of giving back to the community and its is called a crypto fusion center and this is a free service that allows people everyone is vetted both law enforcement and vast obviously law enforcement is a lot easier for us to bet but we do make sure then that everyone is vetted so that when people make submissions they aren't just trying to blacklist some Wales wallets and therefore and feed his ability to maybe do a trade and cause financial hardship but this allows real-time notification of ransomware addresses that addresses these kinds of things where members then if they receive notification and find out that the this address is within their system they can freeze those funds and we try

to catch these bad actors as early as possible to help the Romans to grow so collectively we are the most comprehensive suite of compliant services found globally and we also are a publicly traded company so we also have that transparency and accountability that offers further confidence to know the bank into the law enforcement so so that's blockchain tells group in a nutshell okay well thank you think think that and you mentioned education right as a core point within what you're doing and I think a lot of other other companies and and and phileas within within our industry are really pivoting to that

educational side so do you have any maybe key key elements of Education that you might want to put forth to our audience to to our listeners here today about blockchain forensics and maybe some some key takeaways that they may be able to to know or understand about this well I think in order for companies to embrace what blockchain and cryptocurrency has and the advantages behind it then in order for them to be able to enter into this space obviously education they need to be able to understand how they can accomplish their their their roles and their requirements

within the organisation and and how they can embrace it and so in order for them to be able to put forward to management [Music] suggestions around the opportunity of this this area they need to be able to really look under the hood and and that's what our our education material does offer it is not really something that pushes our services it really is a true in-depth understanding about the intricacies of how things work and and how from a from a regulatory aspect they can perform their jobs and so we really

do allow them when they come out the other side to be able to have the information that's necessary to be able to provide recommendations and show how they can integrate and interact with this new form of currency and and and so yeah that's that's what we really offer okay awesome and I think it's very important for every individual not only was in the blockchain space but but just out there that our technology I'm apt to to understand these these different iPods for sure let's say the the Deep Web the the dark dark web as well and to understand what what is going on in the background so they don't get may be

caught up by some of these illicit activities and that they're they're aware of what's of what's going on so definitely yeah I think I think it's very very important Shh it's yeah it's fascinating I mean you know until this career came along I and you know I knew of the dark web that I had never been on it and it's uh it's a whole nother world I mean we've been training officers that were in the Child Exploitation world and we asked how many and all the dark dark web and and only ten percent had raised their hand so mm-hmm you know I think it comes down to budgets but it's also the ability to access that without compromising their

systems yes and but you can't kind of turn a blind eye to where your targets are existing and interacting I mean it's not easier for a guy to sell drugs from his bedroom that is on a street corner and and if you have an opioid problem you have a crypto problem and the kryptos help you track those things because that's that's how they're making these sales and yeah so it is very very interesting what happens in that other things and I'm thankful that I was exposed oh yes and I think crypto is really really brought around let's say in an evolution or in in this this directory right where before maybe that

the drug dealer was hiding big wads of cash under under their bed and now it can all be on a little piece of paper in a code form right so it's there the level of education isn't there to understand that oh this this this twenty odd digit code can actually contain millions of dollars within it they might just disregard that evidence that could be very important to you to solving the case you hit the nail on the head I mean yeah they pull a guy over and they see a QR code and without this knowledge they would have really no idea that that might be holding and million dollars of illicit buttons yeah ten does on a QR code I think that's that's the one I need to scan next so awesome and so the

community are always eager to predict the future so where do you think blockchain forensics is headed well it is sort of a pick and shovel in the industry I mean it's it's a necessity in a bunch bunch of different verticals as I mentioned and I really I think for this industry to grow education needs to happen and that will happen by way of government adopting policies that allow countries to sort of interact or embrace what was crypto is doing and then you can't shut it off we can't turn off the internet so we all know it's here to stay and and so you know forensics will continue to play an integral role in

ensuring that further adoption and growth of it will take place okay yeah and and one last question if I may um Lance so what what is your vision for for the future then of this whole industry maybe blockchain forensics aside how do you see the whole whole industry growing from from the point at with it at which it's at today Shh well I think we're kind of at this precipice of where people are really actually starting to see how blockchain is gonna impact everything in our lives and make things more efficient more accountability less fraud and I think on the crypto side I mean obviously Bitcoin

was a great example of what blockchain has and its transformation and how it's disrupting always of supply chain management healthcare or all these kinds of things and on the crypto side I think that you know in the next five years we'll see ten strong leaders in the crypto space from Bitcoin etherium stellar rootstock and RSK and the rift token and these kinds of things and the Lightning Network that's a layer on top and the omni layer and but you know I I think in ten years we'll see that there

will be maybe only five real strong players and I think we'll see how equals over two hundred and seventy eight thousand tokens out there there's you know two thousand different types of Kryptos with my last count and that's probably low now and but at the end of the day I think that you know dough will see really only the ones that truly have overcome some of the technical bounds that some of the other cryptocurrencies face and you know the Bitcoin itself will sort of be the gold standard you know you still can't find you can find certain people that don't understand that there's a difference between

blockchain and cryptocurrency and so you know we're still sort of at that educational state for certain individuals but a lot of people now have that understanding ability to find the differences and I think that people are really going to take advantage of what it offers from digitizing assets from you know real estate and land holdings and Land Registry and meaning of the thing so it's gonna be really exciting to see how it really starts to prove out how this technology can be utilized and we're we're past the you know the prep the winter thankfully by the looks of it and you know our

future is very exciting on a number of fronts and and I'm thrilled to be a part of it and help shape this new financial position I'm awesome awesome well there they have it folks time will only tell but there's lots lots to be I'm hopeful about um great so if you enjoyed hearing this short conversation with Lance feel free to check out more on our website Krypto Valley not Swiss we house plenty of advanced educational content and even provide you with information on how you can join our growing community so great well thank you once again Lance for for discussing with us here today and yes

stay tuned stay safe and until next time from the Krypto Valley in Switzerland thank you sure us thanks for joining thanks everyone for listening [Music]