FBI has 130 open cryptocurrency cases

June 28, 2018
Chris Wheal

While the US Federal Bureau of Investigation (FBI) is aware of the ICO scams and other phishing activity, it’s main focus on cryptocurrency-related crime is much more serious, and it currently has 130 active cases.

FBI agent says bureau has 130 open cases related to cryptocurrencies: Shutterstock

The agency’s cases that are “threat tagged” to virtual currencies involve human trafficking, illicit drug sales, kidnapping and ransomware attacks, said FBI Special Agent Kyle Armstrong, speaking at the Crypto Evolved conference in New York on Wednesday.

Virtual currency initiative

Armstrong manages the virtual currency initiative for the bureau’s money laundering unit, active now for around three years.

He said the FBI had observed a surge in illegal activity related to cryptocurrencies and added that the 130 open cases being handled by his initiative was just the tip of the iceberg.

“There are thousands of cases in the bureau, so its a small sliver at this point,” he was reported by Bloomberg as saying.

Drug trafficking

He added that the opioid epidemic was increasingly tied to cryptocurrencies, with the dark web enabling a surge in drug abuse across the US. “Illegal online marketplaces are where 10% of global drug users make their purchases.”

He also claimed that the FBI had seen a “significant rise in extortion schemes” related to virtual currencies on the southwest border of the US.

FBI takes ‘neutral view’

While the bureau has seen a rise in crypto-related crime, Armstrong said the FBI was not “anti-cryptocurrency”, but took a “neutral view” – recognising several pros and cons.

While it’s easier to “follow the money” with cryptocurrencies than it is with cash, the anonymity of blockchain often hampered investigations, Armstrong said.

Homeland security

Meanwhile, a Department of Justice official notice published on Wednesday reported that Homeland Security agents posing as cryptocurrency traders on the dark net arrested more than 35 criminals and seized nearly $24m of their assets.

The DOJ said that among the assets seized were bitcoins and other cryptocurrencies worth around $20m, illicit mining devices, drugs and gold.

The year-long undercover operation involved agents from the New York Homeland Security division who posed as crypto traders looking to launder fiat currencies for digital tokens on the dark net.

Post written by Chris Wheal
Chris Wheal is editor of OpenLedger's news and features service. An award-wining business journalists himself, he runs a team of freelance journalists from across the UK and north America.

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