Latest / The Money and Banking Law Podcast with Joe Silvia / Cryptocurrency Investigations with Kevin Strenski of Nardello & Co.

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Cryptocurrency Investigations with Kevin Strenski of Nardello & Co. · The Money and Banking Law Podcast with Joe Silvia

• 0:01
  Hello and welcome to the Money in Banking Law
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  Podcast with Joe Silvia, brought to you by Duane
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  Morris, an international law firm with roughly
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  30 offices and 1 ,000 lawyers all over the world.
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  I'm your host, Joe Silvia. I'm a former Federal
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  Reserve lawyer who represents banks, fintechs,
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  and financial services clients on M &A, payments,
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  and regulatory matters at Duane Morris. I'm also
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  a core member of our banking, fintech, and digital
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  assets and blockchain practices. Now, while we
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  can't provide legal, financial, investment, or
• 0:29
  tax advice on the podcast, our goal for the Money
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  and Banking Law Podcast is to inform and educate
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  our clients and friends on both the fundamental
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  concepts and structure of the banking ecosystem,
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  as well as critical developments in the law and
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  regulation of money and banking. Thanks for joining
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  us today. As always, if you have any questions
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  from any of our podcast episodes, please reach
• 0:48
  out to me at jsylvia at dwaynemorris .com. All
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  right. Well, thanks for joining. We've got one
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  of our first guests here, Kevin Stransky from
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  Nardello & Co. So, Kevin, why don't you tell
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  me a little bit about what your background is
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  like and then what you're doing at Nardello &
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  Co. I know your partner was on our first panel
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  on AI. So, what can you tell us about what you're
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  up to? Of course. My name is Kevin Stransky.
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  I work at Nardello & Co. I do our cryptocurrency
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  investigations. My background, previous to Nardello
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  & Co., which I joined in January, I was a contractor
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  for the Department of Defense, Department of
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  War, focused mostly on illicit finance, particularly
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  cryptocurrency investigations. So kind of where
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  a lot of my focus lies is rooting out, identifying,
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  attributing, and rooting out illicit activity
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  on the blockchain. That can take many different
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  forms. So it's not always going to be on -chain.
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  We always say that the best investigations are
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  only going to be about 50 % on -chain. The rest
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  is going to come off -chain with your traditional
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  attribution, finding the actual person and true
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  name, figure out where they live, any sort of
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  sanctions implications for a business or financial
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  institution, and creating a holistic picture
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  of risk. Yeah, I mean, we first connected at
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  the Merkle event that we did in New York a few
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  weeks back. You know, one of the things when
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  I talk to, especially traditional financial institutions,
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  banks and otherwise, one of the first things
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  and the immediate reaction that I get is, well,
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  blockchain and digital assets, digital currency,
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  Bitcoin. It's just a way to launder money, right?
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  So it's anonymous. You can't find anything. And
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  the more that I try and talk to them, some come
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  around a little bit to acknowledging that. Yeah,
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  it's anonymous, but there's a lot of transparency
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  as well that you can get to. And so then I talk
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  to folks like you and it's like, no, you're doing
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  these investigations and finding the actual people
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  behind the numbers and the hashes and all that
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  stuff. So that's, I mean, that's really fascinating.
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  Nardello, help me understand a little bit more
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  about Nardello more broadly with the company.
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  Yeah, Nardello and Co. were a global investigation
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  firm. So I work in our forensic investigation,
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  financial investigation and forensic accounting
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  practice. So not just crypto, right? That's my
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  bread and butter and where I sit. But we do all
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  sorts of traditional investigations, due diligence,
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  corruption, white collar, criminal defense, things
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  of that nature. But I really like what you said
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  earlier. Crypto is a common misconception that
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  it's anonymous. It's called pseudonymous because
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  you can actually find someone's real... identity
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  through cryptocurrency tracing which is exactly
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  the type of work that i do and i think that that's
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  super important for people to understand that
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  you know it seems like a black box it's scary
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  if you've never made a crypto transaction but
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  It's not. And we can apply a lot of the same
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  principles that we do for anti -money laundering
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  controls and traditional financial institutions
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  to the blockchain to make it make sense, but
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  also to make it less scary. So more people will
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  adopt it, understand the rails and the risks,
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  and that it's really not too different at the
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  end of the day. That's awesome. So just generally,
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  I want to ask what you're kind of looking forward
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  to as we look at consensus in the next couple
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  of days. But also just from a general perspective,
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  what... is there anything in particular you're
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  seeing in the market or are you being asked to
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  perform certain tasks more repetitively more
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  repetitively than others or more consistently
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  than others you know where do you see some of
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  the market in terms of the investigation side
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  going at least at this point yeah i think that
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  um in the cryptocurrency space there's always
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  been a lot of there's been a lot of competition
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  right that's definitely a major area that I think
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  will continue to increase, especially as the
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  market has shrunk a little bit on the crypto
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  side and funding has moved more towards AI. Trying
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  to understand what's going on in the competitive
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  space and also the risk. I mean, now you can,
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  through prediction markets, you can make money
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  pretty quickly through having access to good
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  information. These are lots of, at least a lot
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  of investigations. folks like myself. But for
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  consensus and moving forward in the crypto industry,
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  I really want to see more conversations like
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  the one we're having about, you know, I think
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  real adoption comes through trust, building trust
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  through real guardrails, through real compliance
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  systems, through KYC, and feeling like your money
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  is safe. Every time there's another hack, people
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  always feel skittish and rightly so. But I think
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  the way forward is not through new technology
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  innovation necessarily. It's through compliance
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  and building trust, bringing in partners from
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  the traditional financial world, brands you know
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  and trust, folks like yourself, to bring that
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  trust, to bring more people on chain. Yeah, that's
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  absolutely right. When I was on the panel at
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  the first Marble event that we did, one of the
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  questions was what... What will it take for broader
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  adoption? I think we were talking more specifically
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  about stable coins on that panel. My point was
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  exactly what you just said, right? And this was
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  not planned, but that's exactly what I said is
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  we need to avoid bad press. We need to avoid
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  bad news because every time something like that
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  happens, there's a group of people or whether
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  it's traditional finance or... one side of the
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  aisle or the other says look that's why we don't
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  like it because we knew this was going to happen
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  and here's the proof again and so again you're
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  right building the trust and trying to be on
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  a consistent level field level -ish field where
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  there's not bad event after bad event that's
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  I mean that to me is one of the most important
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  things for us going forward yeah And I think
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  that definitely there's a lot of bad press around
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  traditional financial ecosystem, right? Fiat's
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  used every day for bad things. But the difference
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  is when you're trying to build the transaction
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  platform of the future, you're trying to completely
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  revolutionize the way we interact with our money,
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  you're fighting an uphill battle because you're
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  dealing with trusted brands and ways of making
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  payments that have been around for decades and
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  centuries. You kind of need to establish yourself.
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  We need to make sure that we win over people
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  through... more compliance than perhaps is necessary
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  because you have to fight that uphill battle
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  to gain more adoption. Yeah, 100%, 100%. So anything
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  in particular here, consensus outside the conversations
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  that you're looking forward to? Who's most important
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  for you to be meeting and connecting with? I
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  think folks like yourself, law firms, a lot of
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  times when their investigations are necessary,
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  the first call is to their counsel. folks like
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  yourself. But I think also talking to builders
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  in this space, getting a sense of not only, hey,
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  if you ever have a problem, give them a call,
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  but also start the conversation with them and
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  make them start to think, okay, how do I build
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  my compliance into my product so it's not an
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  afterthought and I'm not having that, you know,
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  oh, s*** moment of, oh gosh, I really need, I'm
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  in a bad spot, I really need help now. Taking
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  proactive steps to think about that as part of
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  the basis of any strong product. And also just
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  learning, learning from folks like yourself,
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  learning from people in the industry. It's always
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  been exciting. Yeah, I mean, when I went to the
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  event last year in Toronto, it was just like
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  a tidal wave of learning because there's a lot
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  of folks that are super deep into very esoteric
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  things in this industry, which is great. But
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  coming from a more traditional perspective, especially
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  traditional finance or traditional law, it's
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  kind of a whirlwind sometimes. But there's a
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  lot of people here. I'm told the weather is going
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  to improve the next couple of days down here
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  in Miami. So we'll see. But anyway, Kevin, I
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  really appreciate you being here. I appreciate
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  you taking the time. I hope that we can keep
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  connecting and have you on again in the future.
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  And I'm sure that we'll find some things to work
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  on. with some bad actors at some point. Thank
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  you for having me. Until then, I appreciate it.
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  Thanks Kevin.