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Investors and Not Criminals dominate Bitcoin Transactions, Says Federal Agent

Lilita Infante, a special agent of the United States Drug Enforcement Administration (DEA) has declared that Speculative investors dominate Bitcoin transactions as against criminal activities like money laundering, tax evasion, and drug trafficking.

Legitimate Transactions Dominate Criminal Cryptocurrency Activities

According to Infante, the ratio between legitimate and illegitimate uses of Bitcoin and cryptocurrencies has flipped in the past five years. Speaking to Bloomberg, Infante, a member of the DEA’s special 10-person Cyber Investigative Task Force said that illicit activities used to dominate the crypto space. According to Infante, in 2013, almost 90 percent of crypto transactions was for illegal purposes.

While the decrease isn’t an indication of criminals moving away from crypto, Infante declared that its use no longer overshadows that of retail investors. According to Infante:

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.

Cryptocurrency is the Native Currency of the Dark Web

Cryptocurrency remains the de facto currency of choice for transactions in the dark web. BTC first caught the public eye during the Silk Road investigation which shed light on the digital currency’s use in illegal activities.

According to Infante, criminal organizations are using cryptos more often to launder money due to the speed of the transactions as well as the absence of paper trails. Criminals tend to find such conditions favorable for keeping their dealings under the radar.

Criminals Can Keep on Using Bitcoin

However, Infante isn’t the least bit worried about the trend, saying:

The blockchain actually gives us a lot of tools to be able to identify people. I actually want them to keep using them.

Despite the anonymity of cryptocurrency transactions, it is still possible to track the movement of funds. Bitcoin, for example, uses an immutable public ledger. Thus, it is easy for the DEA or any other department of justice agency such as the FBI or ATF to trace funds.

While there are privacy-focused cryptos like Monero and Verge, they aren’t as liquid as Bitcoin, making them unsuitable for the needs of criminal organizations. Infante also revealed that even if criminals elect to use these privacy-centric coins, government agencies still possess the capability to track the funds.

What do you think about the revelations made by Infante? Keep the conversation going in the comment section below.

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UK Police seizes 2 Million USD in BTC from Drugs Trafficker

The Surrey County police department in the UK became the first in the country to confiscate more than 2 million dollars in Bitcoin (BTC), which they discovered after a careful investigation that lasted more than a one year.

Porcedure Followed by the authorities. Courtesy Surrey Police

According to information revealed by the police, the investigations began in 2017 when they received a report of an alleged kidnapping in April.

Upon investigating the complaint, they proceeded to search the victim’s home. As a result of this investigation, the hostage was identified as Seregjs Teresko. They also collected cash amounts of £220,575.02, €30,075 and ฿,040 (Thai baht) at home.

The authorities mention that Mr. Teresko contacted the police the next day, telling them that he was okay. When the authorities asked him about the massive amounts of cash, Mr. Teresko refused to explain himself.

This refusal aroused the suspicions of the research agencies, which decided to dig a little deeper. In a subsequent raid, they found that Mr. Teresko owned a cannabis factory.

As a result of these investigations, Teresko was arrested and pleaded guilty to money laundering, cultivation of cannabis and the possession/control of articles for use in fraud at Kingston Crown Court.

Seregjs Teresko was sentenced to nine years and three months imprisonment.

Bitcoin Helps the Industry. ANY Industry

Some of the items seized by the Police. Courtesy Surrey Police

Police authorities said they continued to investigate after the arrest and discovered a large number of valuable assets: credit cards with multiple names, fake IDs, expensive clothes, watches, jewelry, electronic equipment and gold bars.

They also discovered a hardware wallet…

The method used to access the content of the wallet is not very well explained; however, the authorities managed to obtain the private keys and millionaire funds that Teresko possessed:

“At this stage, it was unknown what was inside the Bitcoin wallet – if anything. With the support of the South East Regional Organised Crime Unit (SEROCU), who provided us with legal, tactical and technical assistance, we made a successful application at Magistrates Court under section 47 of POCA to seize the contents of the wallet.

To our astonishment, the account contained 295 Bitcoins which were moved into a wallet controlled exclusively by Surrey Police. This was the first time that this specific POCA legislation was used in the UK to seize cryptocurrency.

Shortly after, an application by the CPS was made to grant us legal permission to restrain (control) and realise (convert) the Bitcoins. It was ruled that the Bitcoins were ‘realisable property,’ so we decided to convert the Bitcoin into pound sterling, enabling the amount to be confiscated under POCA.”

Members of the police hope that this critical achievement will serve as a lesson to all those crypto-criminals. Detective Inspector Matthew Durkin, of the Economic Crime Unit, said:

“I hope this sends a clear message to criminals using bitcoin to fund illegal activities; it’s not an anonymous as you think, we are able to trace you, and we will prosecute (you)”


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$1.2 Billion Dollars Have Been Stolen Since 2017 According to a Report

As cryptocurrencies expand and attract many investors all over the world, there have also been criminals trying to scam users and steal their funds. According to estimates form the Anti-Pishing Working Group, criminals have ben able to steal about $1.2 billion dollars in cryptocurrencies sin the beginning of 2017.

Cryptocurrency Criminals

The research shows that an important number of virtual currencies have been stolen from their owners. These are very alarming numbers for the crypto community. How to avoid being hacked if even top virtual currency exchanges have been affected by hacks?

The estimates that the non-profit group was able to gather, include reported and unreported theft of cryptocurrencies. That includes the most important hacks in the last times, and also minor thefts that couldn’t be reported to local authorities.

Dave Jevans, Chief Executive Officer of the cryptocurrency security firm CipherTrace, explained:

“One of the problems that we’re seeing in addition to the criminal activity like drug trafficking and money laundering using cryptocurrencies is the theft of these tokens by bad guys.”

Additionally, the recovery rate of owners has been 20% of the stolen funds – which is always better than nothing. Though, these numbers could be bigger if other security measures are implemented. But the truth is that law enforcement officials are having trouble to find criminals involved in these thefts.

According to Jevans, the new General Data Protection Regulation (GDPR), will negatively impact the overall security of the internet and will also aid cybercriminals. GDPR rules aims to simplify the rules that companies ned to follow

“By restricting access to critical information, the new law will significantly hinder investigations into cybercrime, cryptocurrency theft, pishing, ransomware, malware, fraud and crypto-jacking.”

Important Hacks

Since the beginning of 2018, the market has experienced different hacks that took place in different virtual currency exchanges. Two of the most important where the Japanese exchange Coincheck and the Italian platform BitGrail.

Coincheck was one of the most important virtual currency exchanges in Japan. At the beginning of the year, the exchange reported that it had been hacked resulting in a loss of 523 million NEM coins – which at that time were valued at $500 million dollars.

The company had to explain the situation to the media giving a press conference. The cryptocurrencies were not properly stored in cold or multi sig wallets, making it very easy for hackers to access the funds.

Another important hack occurred to BitGrail, an Italian cryptocurrency exchange that was focused on Nano tokens (former RaiBlocks / XRB). During a hack that took place at the beginning of February, the company announced that lost 17 million Nano – which price fell from $11.5 to $9.12 dollars.

$195 million dollars have been stolen, which means that between Coincheck and BitGrail they account for an important percent of the total $1.2 billion dollars stolen since the beginning of 2017.

After these two hacks took place, other exchanges decided to impose further security measures to avoid being attacked. It is always advised to users to save their virtual currencies in cold storage wallets.