Over the past few years Bitcoin and other cryptocurrencies have become increasingly relevant, both in their usage and market caps. Indeed, this growth has also come with its consequences – including financial crime such as money laundering or hacking. Slowly but surely, however, the US government as well as governments across the world have worked to improve responses to financial crime in the arena of cryptocurrency. Just recently, the U. S’s Secret Service has cracked down on illicit crypto transactions, successfully seizing over $102 million in cryptocurrencies from criminals. The way agents are able to do this is by actively leveraging crypto’s open-source nature, in which all transactions can be seen on a public ledger. By keeping track of the flow of Bitcoin and other cryptocurrencies on the blockchain, the Secret Service can conduct financial and cybercrime investigations successfully.
David Smith, assistant director of investigations explains it well, saying: “When you follow a digital currency wallet, it’s no different than an email address that has some correlating identifiers,” and that “once a person and another person make a transaction, and that gets into the blockchain, we have the ability to follow that email address or wallet address, if you will, and trace it through the blockchain”. What do you think about crypto’s position in the world of cyber-financial crime? And does its fundamental open-source architecture account for the anonymity it lends to users?
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.