While supervisory special agency Kyle Armstrong says the Federal Bureau of Investigation (FBI) sees cryptocurrencies in a neutral light, he mentioned at a conference that the agency currency has 130 open cases related to virtual currency.
Armstrong made his remarks at Wednesday’s Crypto Evolved conference in New York. He said the cases are a “small sliver” in the FBI’s workload, which equates to thousands of cases.
However, he noted the agency has seen a rise in both cryptocurrency payments facilitating illegal activity and virtual currency extortion schemes on the southwestern boarder of the United States. Armstrong said some of the cases associated with digital currencies include crimes like human trafficking, illegal drug sales, kidnapping, and ransomware attacks.
Armstrong remarked at the conference how blockchain’s distributed ledger technology means agents have an easier time tracking digital currency than fiat money, but said the anonymous nature of some transactions can be a big hindrance to investigations.
The debate about cryptocurrencies and their connection to crime across the world continues as virtual coins get more and more popular. A new bill recently passed in the U.S. House of Representatives empowers the Comptroller General to examine how cryptocurrencies facilitate sex trafficking and illegal drug sales.
The authors of the bill note that the U.S. Drug Enforcement Administration said in their 2017 National Drug Assessment report how the opioid crisis is being fueled by illicit online marketplaces and digital currencies. Others point out that cryptocurrency’s use for instances of criminality like terrorist financing are overstated because of the lack of places that accept bitcoin and other cryptocurrencies, especially when it comes to buying high-capacity weapons or massive amounts of supplies.
The FBI has increasingly been interested in tackling cybercrime cases that involve the use of cryptocurrencies. Then acting director of the FBI, Andrew McCabe, noted in June of last year how the agency was having more trouble getting digital information, especially when it came to instances of “drug traffickers using virtual currencies to obscure their transactions.”
The FBI’s 2018 budget request asked for $21 million dollars and 80 new employees in order to research new technology that could help fight cybercrime. Earlier last year, some agents expressed concern about privacy coins like Monero (XRP), since they believe its technology could hamper criminal investigations.
Agencies like the FBI also rely on work by outside software startups to get information about cryptocurrency transactions and their potential connections to crime. Entities like the Blockchain Alliance help law enforcement chart out digital currency transactions to find patterns. Once they are able to pin wallets to criminal activity, the organizations work to trace money flows across cryptocurrency networks and into normal bank accounts.
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Last modified: June 11, 2020 8:43 PM UTC