Criminals no longer utilize bitcoin
Henry Tan
Criminals no longer utilize bitcoin as much as before to stage their illicit acts, a study by the US Drug Enforcement Administration (DEA) has discovered.
“The ratio of legal to illegal activity in bitcoin has flipped… criminal activity was behind about 90 percent of transactions in the cryptocurrency,” DEA special agent Lilita Infante explained to Bloomberg, referring to her analysis of blockchain data.
However, it does not mean criminals stopped turning to bitcoin to continue its illegitimate activities as the total transaction volume associated with illegal uses has escalated since 2013, Infante, who is part of the 10-person Cyber Investigative Task Force tasked to delve into dark web and crypto-related inquiries, said.
“The volume has grown tremendously, the amount of transactions and the dollar value has grown tremendously over the years in criminal activity, but the ratio has decreased. The majority of transactions are used for price speculation,’’ she added.
“Though users sometimes will exchange Bitcoin for other coins with lower fees and faster transaction times to transfer funds, the overwhelming majority of dealings are still in Bitcoin,” Bloomberg noted.
Infante said that although wrongdoers will keep on using digital currencies, this is fine with them. “The blockchain actually gives us a lot of tools to be able to identify people. I actually want them to keep using them,” she added.
Privacy-focused virtual currencies including Monero and Zcash are more anonymous than bitcoin but are not liquid enough, according to Infanta. Still, she said they still have ways to track down criminals, adding wallet addresses can reveal identities of users.
“HSI agents are increasingly encountering virtual currency… in the course of their investigations,” Matthew Allen, assistant director of ICE Homeland Security Investigations (HSI), said in a written testimony for a Senate committee hearing on modernizing anti-money laundering (AML) laws last November.
Earlier, a high-ranking official of the US Secret Service urged Congress to file more measures addressing challenges connected to digital currencies with improved anonymity. He said certain virtual currencies have been used extensively for illicit activity.”
In June, the US House of Representatives unanimously passed Bill H.R. 6069, or the Fight Illicit Networks and Detect Trafficking Act, which “would require the Government Accountability Office (GAO) to carry out a study on how virtual currencies and online marketplaces are used to buy, sell, or facilitate the financing of goods or services associated with sex trafficking or drug trafficking. The GAO study would also examine how virtual currencies can be used to detect and deter these illicit activities.”
“Illicit markets where drug and human trafficking take place are constantly evolving, especially on the dark web…Cryptocurrencies can mask traffickers’ transactions, affording them a level of anonymity when conducting illegal activities,” California Rep. Juan Vargas, who penned the bill with Rep. Keith Rothfus, said after the measure’s passage.
“Virtual currencies, such as bitcoin, dash, zcash, and monero, can be used for legal purchases. It has also been reported that virtual currencies are being used to run illegal online marketplaces to sell drugs, including the opioid fentanyl, and contributing to the opioid crisis in America,” the Republican Policy Committee explained on its website.
