The Crypto Detectives Are Cleaning Up
Summary
Before a new breed of cryptocurrency detectives helped bring him down, Ryan Felton marketed his crypto scheme with a grandiose promise: He was creating “Netflix on the blockchain.” He called the crypto-themed streaming service FLiK. The digital currency was invented in 2008 by a mysterious figure named Satoshi Nakamoto, who envisioned a private, decentralized form of commerce that would operate outside the supervision of any government or financial institution. Lately, though, Chainalysis has faced competition from smaller rivals including TRM Labs, a tracking firm that has gained prominence by selling software for new types of cryptocurrencies with names like Solana. “It’s pretty trivial to use a blockchain analysis tool to see what transactions are sending money back to El Salvador,” said Justin Ehrenhofer, an executive at the crypto privacy firm Cake Wallet. But the worst behavior in the crypto industry today is arguably even more difficult to combat: fraudulent offshore firms run by secretive executives, companies that engage in complex financial engineering to cover up holes in their accounts.
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