A massive sting operation in the US has resulted in the seizure of $20 million in cryptocurrency and the arrest of 35 people, according to a statement from the US Department of Justice. This was the first such operation to be conducted nationwide.
The suspects are accused of selling illegal goods on the darknet.
Agents posed as money launderers on the darknet and exchanged US dollars for cryptocurrency. Authorities nationwide opened 90 investigations from information gained in this way. The seizures and arrests are the results of four weeks of work and approximately 100 enforcement actions.
Goods seized also include $3.6 million in fiat currency and gold bars, approximately 100 firearms, “massive amounts” of illegal narcotics, and Bitcoin mining devices and other computer equipment.
The authorities were able to link approximately 50 vendors to their accounts despite their using anonymous technology to transact.
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The announcement mentions several incidents in which drugs were sold for cryptocurrency, which was then laundered. For example, two Maryland-based individuals are accused of manufacturing Xanax and selling it for Bitcoin on the darknet before and laundering the Bitcoin via financial transactions. From these men, the government is seeking the forfeiture of “no less than $5.665 million, plus the value of 4,000 Bitcoin believed to be the proceeds of the illegal drug sales, two residences, and a vehicle used to facilitate the drug distribution.”
In another case, $437,000 in cryptocurrency (Bitcoin, Etherium, and Komodo) was seized from an individual who had allegedly been selling a selection of illegal drugs in Ohio.
The investigation is ongoing and involves several agencies of the US government – the Department of Justice, Immigration and Customs, the Secret Service, the Postal Inspection Service, and the Drug Enforcement Administration.
Deputy Attorney General Rosenstein said: “Criminals who think that they are safe on the Darknet are wrong. We can expose their networks, and we are determined to bring them to justice.”
James J. Hunt, Special Agent in Charge, said: “Because the Darknet invites criminals into our homes, and provides unlimited access to illegal commerce, law enforcement is taking steps to identify and arrest those involved. I applaud all the agencies who participated in this groundbreaking investigation.”
This case has echoes of the Silk Road investigation of 2015. Silk Road was a darknet market website through which illegal goods (in addition to legal ones) were sold for cryptocurrency. After an extensive investigation, operator Ross Ulbrich was apprehended and sentenced to an unprecedented life in prison without the possibility of parole. And the case continues; a few weeks ago, Ulbricht’s alleged advisor, a Canadian citizen, was extradited from Thailand to stand trial in the US.