The U.S. Secret Service has cracked down on crypto fraud and has seized more than $102 million in illicit digital currencies since 2015.
In a recent CNBC interview, the head of the agency’s investigations office David Smith, said cracking a crypto case is often like a “house of mirrors.”
Investigators are finding thieves will transfer stolen bitcoin and other digital currencies into stablecoins.
Smith, the assistant director of investigations, said agents and analysts actively track the flow of bitcoin and other cryptocurrencies on the blockchain, similar to an old-fashioned surveillance. Best known for protecting presidents, the Secret Service also conducts financial and cybercrime investigations.
“When you follow a digital currency wallet, it’s not different than an email address that has some correlating identifiers,” Smith said at the agency’s headquarters. “And 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.”
Smith was interviewed at the agency’s Global Investigative Operations Center, or GIOC, in which agents and analysts track cryptocurrency transactions worldwide in a secure room at the agency’s headquarters.
The seizure of more than $102 million in crypto has occurred in 254 cases since 2015, according to statistics compiled by the agency. This includes an investigation with the Romanian National Police in which 900 victims across the U.S. were targeted.
Other cases targeted a Russian cybercrime syndicate that used a crypto exchange to launder funds as well as a ransomware operation tied to Russian and North Korean criminals. In These crimes, bitcoin payments by U.S. companies to stop the attacks were sent to the suspects’ crypto wallets.
“One of the things about cryptocurrency is it moves money at a faster pace than the traditional format,” Smith said. “What criminals want to do is sort of muddy the waters and make efforts to obfuscate their activities. What we want to do is to track that as quickly as we can, aggressively as we can, in a linear fashion.”
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