Crypto crime cannot, should not, and must not be tolerated. This is the newfound attitude that we’re seeing as of late as the digital currency industry becomes more mainstream and legitimate. Unfortunately, with the rise of bitcoin and so many other cryptocurrencies in recent months, it appears that many individuals out there are taking chances and engaging in crypto crime so they can garner assets that don’t naturally belong to them.
Crypto Crime Continues Despite Many Efforts to Stop It
The most recent case of crypto crime involves a set of darknet drug dealers. It is estimated that these individuals possessed as many as 392 bitcoin units, which are valued at around $16 million at the time of writing. A federal judge had put out a warrant that called for their immediate arrest, and at press time, it has been reported that the individuals were arrested.
The crypto crime in this case involves money laundering, which the individuals in question have been charged with. While the drug dealers held most of their money in bitcoin and crypto, they funneled about $600,000 of it through improper channels to purchase a squid permit and a fishing boat. The purchases were designed to hide the origin of the money and to conceal any wrongdoing, as it is believed the men in question had no desire to suddenly become the world’s greatest squid fishermen.
As it stands, the boat, the permit and the money have all been forfeited to federal authorities, who are overseeing the case in a small region of Southern California. A court filing explains:
The defendants are in custody of the United States Marshals Service in the district, where they shall remain subject to this court’s jurisdiction during the pendency of this action.
While law enforcement officials have not gone into specific detail regarding how the digital funds were stored, they have hinted that cold storage tactics were utilized as a means of keeping the money offline to make it less traceable. The money was first seized back in early 2019 – a time when bitcoin was trading at the mid-$3,000 level.
Selling Drugs for BTC… Where Have We Seen That Before?
US attorneys claim that the money came through the selling of illegal drugs. In a statement, they say:
The defendant bitcoin was derived from the sales of illegal drugs, including fentanyl patches and opioids dispensed without prescription on the darknet between 2016 and 2019. The vendor began selling illegal prescription drugs on the darknet in approximately 2014 using multiple marketplaces including Dream, Silk Road, Alpha Bay and Wall Street Market, and from 2014 and thereafter, made approximately $250,000 worth of bitcoin each month from the illegal drug sales.
Investigators initially made several purchases from the criminals between 2017 and 2018 to garner evidence of the wrongdoing before eventually raiding the home they were inhabiting the following year.