NY Times - When Bitcoin burst onto the scene in 2009, fans heralded the cryptocurrency as a secure, decentralized and anonymous way to conduct transactions outside the traditional financial system.
Criminals, often operating in hidden reaches of the internet, flocked to Bitcoin to do illicit business without revealing their names or locations. The digital currency quickly became as popular with drug dealers and tax evaders as it was with contrarian libertarians.
But this week’s revelation that federal officials had recovered most of the Bitcoin ransom paid in the recent Colonial Pipeline ransomware attack exposed a fundamental misconception about cryptocurrencies: They are not as hard to track as cybercriminals think.
On Monday, the Justice Department announced it had traced 63.7 of the 75 Bitcoins — some $2.3 million of the $4.3 million — that Colonial Pipeline had paid to the hackers as the ransomware attack shut down the company’s computer systems, prompting fuel shortages and a spike in gasoline prices. Officials have since declined to provide more details about how exactly they recouped the Bitcoin, which has fluctuated in value.
Yet for the growing community of cryptocurrency enthusiasts and investors, the fact that federal investigators had tracked the ransom as it moved through at least 23 different electronic accounts belonging to DarkSide, the hacking collective, before accessing one account showed that law enforcement was growing along with the industry.
That’s because the same properties that make cryptocurrencies attractive to cybercriminals — the ability to transfer money instantaneously without a bank’s permission — can be leveraged by law enforcement to track and seize criminals’ funds at the speed of the internet.
Bitcoin is also traceable. While the digital currency can be created, moved and stored outside the purview of any government or financial institution, each payment is recorded in a permanent fixed ledger, called the blockchain.
I'm the first to admit I am an absolute moron when it comes to crypto and blockchain and all that noise.
That said, I vividly remember one of the things all the crypto fanatics touted since day 1 was that this shit was untraceable and gave people the ability to buy and sell things or conduct business transactions anonymously.
Where are those people now?
Reuters - Police in China arrested over 1,100 people suspected of using cryptocurrencies to launder illegal proceeds from telephone and Internet scams in a recent crackdown, the Ministry of Public Security said.
The arrests came as authorities in China step up their crackdown on cryptocurrency trading. Last month, three industry bodies banned crypto-related financial and payment services, and the State Council, China's cabinet, vowed to clamp down on bitcoin mining and trading. read more
The public security ministry said that by Wednesday afternoon police had busted more than 170 criminal groups involved in using cryptocurrencies to launder money.
The money launderers charged their criminal clients a commission of 1.5% to 5% to convert illegal proceeds into virtual currencies via crypto exchanges, the ministry said via its official Wechat account.
Because cryptocurrencies are anonymous, convenient and global in nature, "they have increasingly become an important channel for cross-border money laundering," the association said in a statement.
Cryptocurrencies have already become a popular means of payment in illegal gambling activities. Nearly 13% of gambling sites support the use of virtual currencies, and blockchain technology has made it more difficult for authorities to track the money, according to the association.
Looks like they’re starting to fall like dominoes.
I know the crypto-crazies will find a way to spin this and tell me why I’m an idiot, but I think this actually strengthens the case for why Bitcoin, and crypto in general, are the way of the future.
If oversight is in fact possible, that makes people that aren’t experts, and skeptics, rest a little easier.
But I have an even bigger question- if they can recover funds that were used in ransom ware attacks like this then why can’t they recover the poor bastards who forgot their wallet passwords funds?