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DEA Agent: Speculators Are Using Bitcoin More Than Criminals

Criminals were behind roughly 90 percent of all bitcoin transactions five years ago – a figure that has now declined to 10 percent.

That’s according to Lilita Infante, a special agent from the U.S. Drug Enforcement Administration who spoke to Bloomberg about changing trends in the relationship between the cryptocurrency and criminal activity.

“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,” Infante was quoted as saying.

Despite the shift from criminal use to investment and trading, though, the total volume of criminal bitcoin transactions has still increased over the years as dark market activity has grown. It’s just that the proportions have effectively swapped, according to Infante.

In fact, given this rapid growth in interest for the different use cases of cryptocurrency, U.S. law enforcement has since caught on to the technology to some degree using blockchain technology to trace cases of money laundering and illegal drug trafficking.

Even so, Infante maintained that U.S. law enforcement is ahead of the game, telling the publication that “we still have ways of tracking them” and noting that, at least for the time being, the majority of criminal dealings in cryptocurrencies still occur on the public bitcoin blockchain.

“The blockchain actually gives us a lot of tools to be able to identify people … I actually want [criminals] to keep using them,” she told Bloomberg.

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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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DEA Report: Bitcoin Used for Trade-Based Money Laundering

A new report from the U.S. Drug Enforcement Administration (DEA) claims that bitcoin is being used to facilitate trade-based money laundering (TBML) schemes.

Published by the Department of Justice, the report offers a broad overview of the U.S. government’s efforts to police the illicit drug trade. Included in the study, however, is a segment on cryptocurrencies, which notably states that criminals who launder funds through trading operations are using bitcoin, particularly firms based in China.

The DEA wrote:

“…many China-based firms manufacturing goods used in [trade-based money laundering] schemes now prefer to accept bitcoin. Bitcoin is widely popular in China because it can be used to anonymously transfer value overseas, circumventing China’s capital controls.”

The claim aside, the report doesn’t contain any specific figures on how much money is being laundered through this means. But it does detail efforts to obtain bitcoin holdings through regulated exchanges, stating that China-based groups prefer using the cryptocurrency in an effort to bypass capital controls.

Elsewhere in that section, the paper’s authors argue that over-the-counter (OTC) bitcoin brokers are helping to facilitate these cross-border transactions – a trend they write will continue.

“The increasing use of OTC bitcoin brokers, who are capable of transferring millions of dollars in bitcoin across international borders, as part of a capital flight scheme is expected to continue to intertwine criminal money laundering networks with capital flight,” the report states.

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