- Recent government seizure of funds in crypto equalling $3.6 are a message to those who are thinking about running away the money they acquired unethically.
- A large-scale operation was conducted for the hack suffered by crypto exchange Bitfinex, where thousands of transactions were tracked down passionately.
- Agents of the United States government were packed with resources to track down the culprits of this case, and they made good use of it.
As the people’s understanding regarding how virtual assets operate, becomes shady alongside mainstream cryptocurrency, Bitcoin’s lang of “anonymity slowly becomes ancient.
High-profile cases such as the seizure of $3.6 Billion worth of BTC are enough to fuel the notion that assets whose history of transactions is inscribed on the blockchain are better understood as “pseudonyms,” and are not in the favor of ill-intended individuals.
An Easy Chore
Though it took some time, and it surely is a lot of work to catch the culprits of this case, the US government made it look easy peasy. The agent assigned to IRS-CI puts light on the operations, where the operatives observed the smoke culprits left behind the Bitfinex hack.
A document unveiled by the agent shows how the large scale operation got executed by tracing thousands of transactions involved in the hack, which lead the road towards darknet markets, centralized digital asset exchanges and self-hosted wallets.
Initially, the culprits set the funds aside as being looted in Bitfinex hack via a dark web marketplace AlphaBay. Then the funds circulated in six accounts on several cryptocurrency exchanges, that were registered utilizing email accounts hosted by similar providers in India.
Chains kept getting connected as the assigned personnel tracked the culprits down the road. The hard work paid off and that’s it, Walmart gift cards and gold bars were bought utilizing the stolen funds from Bitfinex, where the trail ended aon Heather Morgan and Ilya Lichtenstein’s house.
The Money Trail
In spite of the culprits’ lengthy dwindling efforts to mobilize funds, government agents came out of the bushes right in front of the suspects, snatching the money back. This is an indication of the US government’s ability and perseverance to solve the case.
Crystal Blockchain Analytics CEO, Marina Khaustova stated that the Bitfinex case was a rocky road because of that big pile of money, and culprits’ deceptive efforts.
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The Justification
The broader story here is that governments — particularly the United States government, but many countries aren’t well behind when it comes to boosting their blockchain-tracing capabilities — are already familiar with the methods and procedures employed by crypto launderers. Perfect tracing on the blockchain may have been a theoretical argument a few years ago, but it is now an experimentally established reality, as shown by enforcement practice.
There are two major reasons why this idea is beneficial to the cryptocurrency sector. One possibility is that victims of significant crypto heists may have some redress. Admittedly, not every case of cryptocurrency larceny will get federal investigators’ limited attention, but perhaps the most high-profile and heinous ones will.
Another significant benefit of law enforcement’s improved blockchain tracking expertise is that it disproves certain regulators’ stale claim that “crypto is a wonderful instrument for money laundering.” As real-life examples show, virtual currencies are the polar opposite of that. One of the main anti-crypto myths will be debunked if this fact is hammered home to policymakers.
Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.
Source: https://www.thecoinrepublic.com/2022/03/01/bitfinex-fund-annexation-is-a-bad-news-for-money-launderers/