FBI Investigates 130 Cases Related to Cryptocurrency

While the Federal Bureau of Investigation (FBI) generally has a neutral view of cryptocurrency, Supervisory Special Agent Kyle Armstrong says that the agency has 130 ongoing open cases related to the crypto space.

Armstrong made his remarks at last week’s Crypto Evolved conference in New York. He noted that the crypto cases are a “small sliver” in the FBI’s workload of thousands of open cases.

However, he also said that the FBI has seen an increase in cases where cryptocurrency payments facilitated illegal activity. There has also been an increase in currency extortion schemes on the border between the USA and Mexico. Some of the open cases involving cryptocurrency include drug trafficking, kidnapping, and human trafficking, among other crimes.

On the one hand, says Armstrong, blockchain’s distributed ledger technology makes life easier for agents. It’s easier to track the movement of digital currency than fiat money. However, at the same time, investigations can be significantly slowed down because of the anonymous nature of some cryptocurrency transactions.

Congress has been asked by a top official in the Secret Service to take immediate action against anonymous cryptocurrencies, ostensibly because they are primarily used for illegal activities.

As virtual currencies gain popularity worldwide, the debate about the connection between cryptocurrencies and crime continues.

The US House of Representatives recently passed a bill that empowers the Comptroller General to examine sex trafficking, illegal drug sales, and whether cryptocurrencies facilitate these activities. The bill’s authors say that the US Drug Enforcement Administration (DEA) stated in their 2017 National Drug Assessment report that the current opioid crisis is fueled largely by virtual currencies and illicit online marketplaces.

However, other experts note that the use of cryptocurrency to finance terrorist activities is overstated simply because places that accept cryptocurrencies such as bitcoin are limited, especially when it involves weapons.

Then acting director of the FBI, Andrew McCabe, said in June 2017 that the agency is having more trouble accessing digital information especially when it comes to “drug traffickers using virtual currencies to obscure their transactions.” The FBI has requested a $21 million budget increase and 80 new employees in order to research and implement new technology that could help combat cybercrime. Privacy coins such as Monero (XRP) is at the top of the FBI’s watch list, as agents claim its technology could hinder criminal investigations.

Currently, the FBI is reliant on work by software startups to access information related to crime. Blockchain Alliance and other entities help law enforcement officials find patterns in transactions, a move that could help agents pin wallets to criminal activity and trace the movement of money across various crypto exchanges and into traditional bank accounts.

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