A senior United States Secret Service (USSS) official says the agency can track the flow of bitcoin (BTC) and other cryptocurrencies in a similar way to email addresses.and which has seized more than $102 million in cryptocurrency in 254 cases since 2015.
USSS Deputy Director of Investigations David Smith told CNBC that the transparent and immutable aspect of blockchain ledgers means investigators can trace transactions more easily than fiat in some cases.
“One of the guiding principles of blockchain technology is that it is a public ledger that is shared and has access to it by everyone with a little bit of computing power, including law enforcement,” Smith said..
“So the secret service hasn’t done anything that wasn’t the original intent of the blockchain. We are just using the same tracking and tracing mechanisms that were intended.”
Agent Smith said that More than $100 million in cryptocurrency has been seized by the Secret Service in international operations targeting cyber scammers since 2015and that agents and analysts conduct investigations from the Global Investigative Operations Center (GIOC) at Secret Service headquarters in Washington DC
Cryptocurrencies are seized in a variety of scenarios. About $1.7 million worth of BTC was seized in a case from March, in which an Estonian man was sentenced to 66 months in prison for his role in at least 13 international ransomware attacks. Another operation brought down an international money laundering operation in Romania, and another involved a group of Russian-speaking cybercriminals, also linked to ransomware.
Protecting the next generation of currency: Learn how we are combating the illicit use of #crypto. Read more: https://t.co/mXhkdPuaii https://t.co/B03ingyr40
— US Secret Service (@SecretService) April 19, 2022
Protecting the next generation of money: Learn how we are combating the illicit use of cryptocurrencies. More information: https://t.co/mXhkdPuaii https://t.co/B03ingyr40
Smith compared the tracking of cryptocurrencies to that of an email address:
“When you follow a digital money wallet, it’s no different than an email address that has some correlating identifiers. Once one person and another make a transaction, and that goes into the blockchain, we have the ability to follow that email address or wallet address, if you will, and track it through the blockchain.”
Smith said that criminals often try to cover their tracks from law enforcement by making as many transfers as possible, which he likened to a “house of mirrors”. Stolen bitcoin and other digital currencies are often converted into stablecoins as a means of avoiding volatility.
“Because, you know, Criminals are human too. They want to avoid some of that market volatility associated with some of the major currencies,” he said..
The US Secret Service is one of the oldest federal law enforcement agencies in the country, initially created to safeguard the nation’s financial infrastructure. Founded as a division of the US Treasury Department in 1865, its sole purpose at the time was to combat counterfeit US currency.
Today, the agency reports to the Department of Homeland Security and often conducts joint investigations with other federal agencies.such as the Federal Bureau of Investigation (FBI), the Cybersecurity and Infrastructure Security Agency (CISA), as well as with international agencies, to achieve their objectives.
On Tuesday, CISA, FBI and US Treasury issued an alert on North Korean-funded cyber threats targeting blockchain companies in response to a $650 million hack of Ronin Bridge.
In February, the USSS launched a cryptocurrency awareness center to raise public awareness of digital asset security and showcase the agency’s work to crack down on illicit use of digital assets..
On the website, the agency said that digital assets have been increasingly used to facilitate a growing range of crimes, including various fraud schemes and the use of ransomware. Nevertheless, the agency also noted that the use of cryptocurrencies was not inherently criminal.
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