Concerns Of Laundering Is No Longer Stopping Growth of Crypto IndustryFebruary 13, 2022 5:17 pm
Recently, a couple in New York was just arrested for the accusation of laundering a record $4.5 billion dollars worth of stolen cryptocurrency.
Although the couple made many mistakes when it comes to reducing tracing, the procedures that were done by the Department of Justice did demonstrate the full suite of capabilities that law enforcement had when it comes to tracing crypto.
As the security industry in the space continues to mature, this could reduce or eliminate many of the reasons that critics used to oppose the crypto industry due to its reputation to be used for money laundering.
Once this stage has been passed, this could then truly start a new age for crypto where it is openly embraced for mainstream adoption.
Pretty cool article describing how someone did not get away with a Bitcoin heist, despite tumbling (aka laundering) and using Monero.https://t.co/oyVivP1jC4
— Kyrre Sjobak (@kyrsjo) February 12, 2022
But those gaffes have obscured the remarkable number of multi-layered technical measures that prosecutors say the couple did use to try to dead-end the trail for anyone following their money.
Even more remarkable, perhaps, is that federal agents, led by IRS Criminal Investigations, managed to defeat those alleged attempts at financial anonymity on the way to recouping $3.6 billion of stolen cryptocurrency.
In doing so, they demonstrated just how advanced cryptocurrency tracing has become—potentially even for coins once believed to be practically untraceable.
Yet investigators seem to have found paths through all of those obstacles.
“It just shows that law enforcement is not going to give up on these cases, and they’ll investigate funds for four or five years until they can follow them to a destination they can get information on,” Redbord says.
Eventually, investigators found the keys for the wallet that the couple had used as a storage account for the laundered crypto.
Some of techniques used by enforcement could possibly used for privacy coins like Monero although the degree of confidence is significantly reduced.
The approach is theoretical and there is some element of chance to it, but the cryptocurrency tracing firm Chainalysis has mentioned that there are some private methods to get around the obstacles for tracing.
The firm has once again confirmed that it is not a 100% sure method although still quite sophisticated for cracking large money laundering cases.
As law enforcement continues to be able to prove that money laundering with crypto is no more an issue compared to money laundering with traditional fiat currencies, governments may decide to eventually relax some regulations for crypto in the future.
The Justice Department’s ability to track the allegedly laundered bitcoin is significant.
Cryptocurrencies like bitcoin and ether are exchanged on decentralized blockchains, which allow people to send and receive the tokens with anonymity.
That anonymity has attracted criminals, with bitcoin and the like often being used as black market currency.
totaled about $14 billion in transfers to illicit addresses last year, according to a January report from Chainalysis.
However, crime accounted for less than 1% of cryptocurrency transactions last year.
Crypto regulation has been a topic of focus for many investors and holders for the year of 2022 and this recent case would prove to influence how the regulations unfold this year.
Heather Morgan is accused of laundering billions of dollars in stolen bitcoin with her husband Ilya “Dutch” Lichtenstein. https://t.co/RTq5Fdkn3w
— Asia Financial (@Asia_Financial) February 13, 2022
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