By Every time criminals convert crypto into fiat a “vulnerability” is created said an official of the U.S Immigration and Customs Enforcement on Tuesday.
The role of cryptocurrency in its use in drug trafficking was discussed during a hearing on the 3rd of October by Matthew Allen an assistant director of domestic operations with the Homeland Security Investigations (HSI) division of ICE before the US Senate Caucus on International Narcotics Control.
Allen said in a prepared statement:
“On dark net marketplaces and other ‘unindexed’ websites, purchases are often paid for with cryptocurrencies such as bitcoin and monero, among many others,”
Most notably Allen claimed that the HSI has had some success in tracking criminals who utilize digital currencies in order to launder fiat profits gleaned from the sales of narcotics.
Cryptocurrencies might make transferring value quite easier, but criminals still need to convert the crypto into fiat & vice versa during their laundering activities.
“Whenever monetary exchanges are made, a vulnerability is created,” he explained.
“This is the time when criminals are most susceptible to identification by law enforcement means and methods,” Allen stated:
“Utilizing traditional investigative methods such as surveillance, undercover operations, and confidential informants, coupled with financial and block-chain analysis, ICE-HSI is able to disrupt the criminals and dismantle the [transnational criminal organizations], as well as the cryptocurrency exchangers who typically launder proceeds for criminal networks engaged in or supporting darknet marketplaces.”
Following this statement, Allen went on to explain the use of multiple crypto exchanges & how criminals could utilize them to launder money. For example, many peer to peer exchanges who refuse to register as money services & do not follow compliance laws is used by criminals in order to remain anonymous.
However, despite these criminal’s efforts, the national & international agencies are currently training investigators in the best ways to effectively track cryptocurrencies said Allen.
“We train investigators … in an effort to deter organizations from laundering proceeds or using cryptocurrencies to fund the purchase of fentanyl/opioids or other narcotics,” he explained.
What are your thoughts on US customs being able to track conversions? Would this be beneficial to the cryptocurrency industry? Let us know your thoughts.
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