The FBI considers cryptocurrencies already a significant problem to the safety of the United States. Director Christopher Wray believes that the problems will only ‘get bigger and bigger’. He made these statements during a meeting of the US Senate Committee On Homeland Security And Governmental Affairs, which Forbes recently covered.
During the meeting senators asked leaders from the FBI, Homeland Security, and the National Counterterrorism Center about potential threat to the country. The topic of cryptocurrencies popped up during the meeting and the FBI was quick to label them a problem. Wray added that the FBI is looking at cryptocurrencies, as they want to be able ‘to follow the money’.
Police can track crime on blockchain
Despite the problems mentioned by the FBI Director, justice departments are already using cryptocurrency blockchains. Last month they used the Bitcoin network and its log of transactions to uncover a pedophile network on the dark web. The police uncovered the Korean site owner and pedophiles from several countries, including the United States, United Kingdom, Germany, Saudi Arabia, Canada, Ireland, Spain, Brazil, and Australia.
Even though wallet addresses are not tied to a person, its transactions are traceable. The connection with a physical locations happens when you order something online. Suddenly a cryptocurrency transaction and the corresponding address reveal a physical location. It just shows that cryptocurrencies are not by definition criminal. As a matter of fact, they are easier to trace than physical bank notes.
Bitcoin losing terrain on the dark web
Because law enforcement is getting better at tracking transactions on the Bitcoin blockchain, criminals are slowly moving away from the popular cryptocurrency. Bitcoin is still the most popular cryptocurrency for shady businesses on the dark web, but other cryptocurrencies are gaining ground.
Europol recently spoke of a ‘pronounced’ shift, and expects coins like monero and zcash to become even more popular. Criminals, shady dealers and anonymous buyers have spend around 1 billion dollars on the dark web this year. On some occasions they spend money on drugs. However, most of the time these criminals pay for malware.
Also published on Medium.