The Secret Service is extirpating illegal cryptocurrency transactions, seizing more than $102 million in cryptocurrency from criminals in 254 fraud-related cases since 2015.
David Smith, Assistant Director of the Office of Investigations, confirmed that the Secret Service tracks the flow of cryptocurrencies on the blockchain.
“When you follow a digital currency wallet, it’s not different than an email address that has some correlating identifiers,” Smith said. “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.”
One of the cases where cryptocurrency was seized regarded an investigation with the Romanian National Police in which 900 U.S. victims were scammed out of money by false ads for luxury items. The perpetrators then laundered the victims’ money into digital assets.
“One of the things about cryptocurrency is it moves money at a faster pace than the traditional format,” Smith continued. “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.”
Smith said that once an illegal activity is identified, the Secret Service will “dig a little deeper into those transactions and deconstruct” them.
“You send me something bad on an email; I know there’s some criminal activity associated with that email address. I can deconstruct, find whatever tidbits of information that you used when you initially logged in or signed up for that email address.”
He also explained that many thieves convert cryptocurrency into stablecoins because “they want to avoid some of that market volatility associated with some of the major coins.”
