The United States Internal Revenue Service (IRS) released its annual report on criminal investigations, and cryptocurrencies played a starring role in the area of cybercrime.
According to the IRS cybercrime unit’s report, more than $3.5 billion in cryptocurrencies were seized during 2021. This would make up to 93% of all seizures made in 2021.
The Most Famous Crypto Cases Solved by The IRS:
Among the most successful crypto cases closed by the IRS cybercrime unit are:
- The seizure of more than $1 billion in cryptocurrencies from “Individual X,” who had successfully hacked into Silk Road and gotten away with part of its funds. The IRS said that an unidentified third-party company assisted its personnel during the investigation.
- The arrest of Roman Sterlingov, who ran the oldest cryptocurrency money laundering service on the Darknet, Bitcoin Fog (operational since 2011). It is estimated that Bitcoin Fog laundered more than 1.2 million Bitcoins during its existence.
- The arrest of Volodymyr Kvashuk for his scheme to embezzle over $10 million worth of gift cards from Microsoft, which he subsequently sold in exchange for Bitcoin. The IRS believes that Kvashuk stole more than 150,000 gift cards while his operation was active.
- The arrest of Glib Oleksandr Ivanov-Tolpintsev (28, Chernivtsi, Ukraine) for operating a botnet to hack the credentials of thousands of computers and sell the information on the Darknet for cryptocurrencies. With the purchased data, other criminals were able to commit a range of crimes, from phishing and extortion to identity theft.
The United States And Crypto Criminals
The Cyber Crime Unit has plans to build an Advanced Collaboration & Data Center (ACDC) in the Northern Virginia area in 2022, as well as an integration of the Washington DC office with the Cyber Support Unit to ensure more efficient work.
The Cyber Crime Unit has an issue with extreme privacy. The team is premised on the “follow the money” strategy it has adhered to for more than a century. However, new decentralized technologies such as cryptocurrencies have made this task harder than ever.
CI’s cybercrime investigative efforts focus on subjects using the internet as an essential means to commit the crime, remain anonymous, and elude law enforcement while concealing financial transactions, ownership of assets, or other evidence.
And beyond the IRS, other agencies are also working hard to combat the use of cryptocurrencies. Earlier this year, President Biden announced that ransomware gangs would be treated under the same category of terrorism —which is quite important if one take into considerations that groups like as REvil, Darkside or Conti are expected to generated losses in the order of twenty billion dollars this year.
During a ransomware attack, criminals encrypt the victim’s data and force them to pay for the decryption key. Some of the victims of ransomware are the Colonial Pipeline, JBS, MIT and other important institutions around the world.
However, even those who pay for such key may be in a lose-lose situation. In a 2020 ruling the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN) declared it illegal to pay a ransom most of the cases.