The year 2021 has been an explosive year for cryptocurrencies and their expansion has reached far and wide, including their use for criminal purposes. According to the report by the Internal Revenue Service (IRS), which is in charge of tax collection in the US, cryptocurrency seizures worth $3.5 billion were made in 2021. And according to analysts at the US federal agency, the trend is set to increase in the coming year.
Cryptocurrency seizures, 2021 to 2022
“I expect a trend of crypto seizures to continue as we move forward into fiscal year ‘22”.
This was said by the IRS head of criminal investigations, Jim Lee during a press conference, also adding about expectations for 2022 that:
“We expect it to stay somewhat in that range, based on some investigations we’re currently working on that are quite large in size and scope. We could exceed that figure next year”.
The Silk Road case
More than 1 billion dollars of the amount seized by the IRS came from the record seizure of Silk Road, a company involved in one of the largest trades of illegal products in history on the dark web, made possible by payment in Bitcoin.
In fact, at the time of the first seizure in 2015, the Bitcoin held by Silk Road were worth $250 each, for a total value of around $16 million. But the growth of Bitcoin prices in recent years has increased their value to over a billion dollars.
IRS tools are enhanced
In the Infrastructure Act recently passed by the US Congress, the federal agency was granted additional funds and tools to combat fraud committed through digital assets.
Among other things, the bill requires cryptocurrency brokers to track and report transactions to the IRS, in an effort to give tax authorities greater visibility into virtual currency exchanges.
In addition, the agency has already decided to hire about 200 people to work exclusively on cybercrime.
DeFi crimes worth $10 billion
On the other hand, cryptocurrency-related crimes have seen a significant increase in 2021. According to some estimates, the value of DeFi-related crimes alone amounted to approximately $10 billion in the year just ended.
According to the Chainalysis Crime Report 2021, the most important cryptocurrency-related crimes are money laundering and cybercrimes, such as ransomware attacks, in which cryptocurrency ransom is demanded in exchange for data stolen by hackers.
In 2021, this type of attack would have yielded around $33 million in cryptocurrency, according to the Chainalysis report.
The report also shows that fraud against Bitcoin ATMs increased dramatically in 2021 due to the increasing popularity of Bitcoin.
Finally, the FBI warned in a report at the end of November of fraud schemes in the US that use cryptocurrency ATMs and quick-response QR codes to facilitate payments.
“The FBI has seen an increase in fraudsters directing victims to use physical cryptocurrency ATMs and digital QR codes to complete payment transactions.”
This is stated in the report.
Source: https://en.cryptonomist.ch/2022/01/08/boom-seizures-cryptocurrencies-2021/