The US Secret Service has seized over $102 million in cryptocurrency since 2015. US agents have become experts in tracking digital assets, like Bitcoin, through blockchain. Despite the tricks put in place by the scammers, the authorities are able to trace the origin of the funds.
The American secret services regularly seize large sums of cryptocurrencies held by criminals. As part of operations, officers recover the private keys held by gangsters or terrorist organizations. Without the wallet encryption key, stored currencies cannot be accessed. A blockchain wallet is indeed secured by a recovery phrase consisting of 12 or 24 words.
Asked by our colleagues from CNBC, David Smith, deputy director of investigations, reveals that more than 102 million dollars in cryptocurrencies were seized by the United States Secret Service since 2015. The sum was raised during 254 seizures. The manager mentions in particular an investigation carried out in collaboration with the Romanian national police, which revealed that 900 investors had fallen into a trap set by pirates. The cryptocurrencies also come from a Russian syndicate of cybercriminals. These scammers used a cryptocurrency exchange to launder their funds.
On the same topic :
Secret services can trace cryptocurrency transfers
Over the years, the secret services have developed real expertise in terms of monitoring of crypto-asset flows on the blockchain. The blockchain, the protocol behind many cryptocurrencies, including the king Bitcoin, makes it possible to trace all transactions. All transfers are encoded in the blockchain, which facilitates tracking by the authorities. Of course, not all cryptocurrencies are equal on this point. Some currencies, like Monero (XMR), are designed to make tracking difficult.
“When you follow a digital currency wallet, it’s no different than an email address that has correlated IDs. And once a person and another person make a transaction, and that enters the blockchain, we have the ability to track that email address or that wallet address, if you will, and trace it through blockchain”explains David Smith.
Companies have also specialized in the analysis of the blockchain. This is particularly the case of chain analysis, the industry leader. The firm regularly works with authorities and law enforcement agencies to help them track down stolen funds. “One of the things to know about cryptocurrency is that it moves money at a faster rate than the traditional format”emphasizes David Smith.
How do cybercriminals try to evade the secret services?
To avoid being tracked, some criminals go through mixing services (notably accessible on the dark web). These services mix cryptocurrencies to prevent authorities from tracking them. “What the criminals want to do is kind of cover their tracks and make efforts to obscure their activities. What we want to do is track this as quickly as possible and as aggressively as possible”continues the head of the secret services.
Quite often, cryptocurrencies stolen by criminals are quickly converted into stablecoinsdigital currencies whose value is stable, says David Smith. “Criminals are also humans. They want to avoid some of the market volatility”, emphasizes the frame. It is during this transfer that the secret services regularly manage to get their hands on the missing persons.
Through its various law enforcement agencies, the United States has managed to amass a large stock of cryptocurrencies. Assets seized by the courts are stored on different digital wallets. Regularly, the recovered cryptocurrencies are sold at auction for dollars. In particular, the government sold more than 30,000 BTC to Tim Draper, a famous investor in the sector. The accumulated money is then used to finance ongoing government projects.
Source : CNBC
