Cryptocurrency is increasingly used in drug and human trafficking

Cryptocurrency: everyone talks about it.

From Dogecoin to Bitcoin, investors are using it to expand their portfolios. And platforms like Coinbase create debit cards that let you use as cash.

But that’s just the surface of how money is spent. Dig deeper into the web and you will find darker uses.



Gretta Goodwin, Director of the Homeland Security and Justice Team at the Government Accountability Office, analyzes the issues surrounding law enforcement in the digital space.

“We found that the equipment was used to facilitate or engage in online drug trafficking and online sex trafficking,” she said.

Goodwin’s team is focused on cryptocurrency and law enforcement’s ability and readiness to track and arrest criminals.

“Virtual currencies may not have been used to pay for the sex trade itself, but they may have been used to pay for the platforms or the placement of the ads,” she continued. “For drug trafficking, we found that it was used as a form of payment. The anonymizing nature of these virtual currencies is such that secrecy and confidentiality are maintained and therefore you can trade with these currencies and no one ever has a good idea of ​​who you are.

Goodwin’s team worked with a number of agencies, including the Department of Justice and the Postal Inspectorate, to identify who uses crypto criminals.

“They told us about how drug cartels and transnational criminal organizations are increasingly using virtual currencies because of their perceived anonymity and because it is a more effective method of redirecting money to across international borders,” she said. “When we looked at suspicious activity reports for the period 2017-2020, and we looked to see how often virtual currency appeared in these reports. These deposits quadrupled during this period. So we know that virtual currency is increasingly being used for to engage in this type of activity.

No more big money bags and drops. Criminals can now use a kiosk – a machine similar to an ATM – to transfer large sums of money with ease and anonymity. And using a terminal is not a suspicious act.

“Virtual currencies are not illegal,” Goodwin continued. “So if you’m in a booth, no one really knows what you’re doing at that booth. It’s just hard to follow.

Kiosks must be registered with the Financial Crimes Enforcement Network, but their location must not be disclosed.

“One of the recommendations we came up with was that the agency be more aware of the location of these kiosks, which would help law enforcement better understand where these transactions could take place,” Goodwin said. . “Physical addresses can improve the information that law enforcement does not need to identify the source of these transactions.”

Identifying sources is the key to cracking down on illegal cryptographic activity.

“If they don’t have the data, they can’t effectively target their resources,” Goodwin said. “Federal agencies have taken steps to combat the illicit use of virtual currencies in human and drug trafficking … but they still face significant challenges.”

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