Feds net over $20M in crypto in darknet sting
For the past year, authorities in the United States have been running undercover operations on the darknet, targeting illicit vendors using cryptocurrencies to flout the law. The expansive operation, which unmasked more than 50 vendors in darknet markets like Hansa, Dream, Silk Road and Alpha Bay, led to the arrest of 35 people and the seizure of over $23.6 million, according to the U.S. Department of Justice (DOJ).
Aside from the DOJ, the operation also drew input from other enforcement agencies, including the DEA, Homeland Security Investigations (HIS), and the Postal Inspection Service. Agents from HSI led the charge, posing as would-be money launderers interested in buying cryptocurrency.
With the help of over 40 different U.S. Attorney’s Offices, the operation led directly to the arrest of 35 vendors caught in the sting. Kenneth Jenkins, assistant director of the U.S. Secret Service, said the result shows the adaptability of the Secret Service in responding to more high tech crimes.
“The Secret Service is proud to work with our law enforcement partners to help combat one of the largest threats to the U.S. financial infrastructure, money laundering with virtual currency. The Secret Service continues to adapt along with these cyber criminals to maintain our level of success in stopping them,” Jenkins said in a statement.
After running the operation for a little over a month, the authorities managed to seize significant stockpiles of illegal drugs, gold, firearms, vehicles, crypto mining devices and computer equipment, as well as nearly 2,000 BTC and other cryptocurrencies, with an approximate value of more than $20 million.
HSI Active Executive Associate Director Derek Benner said the operation proved the authorities had a grip on criminals operating behind the veil of the darknet.
“The Darknet is ever-changing and increasingly more intricate, making locating and targeting those selling illicit items on this platform more complicated. But in this case, HSI special agents were able to walk amongst those in the cyber underworld to find those vendors who sell highly addictive drugs for a profit,” Benner said.
Note: Tokens on the Bitcoin Core (SegWit) chain are referenced as SegWitCoin BTC coins. Altcoins, which value privacy, anonymity, and distance from government intervention, are referenced as dark coins.
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