Bitcoin

$20 Million Worth of Bitcoin Seized in a Crackdown on Dark Web Vendors

$20 Million Worth of Bitcoin Seized in a Crackdown on Dark Web Vendors

The US Department of Justice (DOJ) in tandem with numerous other state agencies, such as Drug Enforcement Administration (DEA) and Homeland Security Investigations (HSI) have arrested 35 dark web traders across the United States.

The undercover operations saw agents posing as money launderers on dark web marketplaces, where they managed to identify vendors of illicit products. Even though cryptocurrencies are often portrayed in Hollywood and popular media as a means to pay for drugs or guns on the dark web, the reality is that less than 1 percent of all BTC transactions are used for funding unlawful activities.

Nonetheless, the dark web still exists and a number of alleged criminals will likely face jail time, while the rest will surely feel anxious after hearing such news. According to the official announcement, the officials confiscated 3.6 million worth of USD and gold, a bunch of weapons including a grenade launcher, drugs, pill pressers and 2000 BTC plus other digital currencies, worth around $20 million in total.

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Speaking on the success of the operation Deputy Attorney General Rod J. Rosenstein said that, “Criminals who think that they are safe on the Darknet are wrong. We can expose their networks, and we are determined to bring them to justice. Today, we arrested more than 35 alleged Darknet vendors. We seized their weapons, their drugs, and $23.6 million of their ill-gotten gains.“

HSI Executive Associate Director Derek Benner added that, “The Darknet is ever-changing and increasingly more intricate, making locating and targeting those selling illicit items on this platform more complicated. But in this case, HSI special agents were able to walk amongst those in the cyber underworld to find those vendors who sell highly addictive drugs for a profit. […] HSI has infiltrated the Darknet, and together with its law enforcement partners nationwide, it has proven, once again, that every criminal is within arm’s reach of the law.“

The overwhelming majority of BTC and other digital currencies that were seized, belonged to 2 of the 35 arrested vendors – Maryland residents Ryan Farace and Robert Swain. According to the indictment, “Farace distributed alprazolam tablets through sales on the dark web in exchange for Bitcoin, and that Farace and Swain laundered the drug proceeds through financial transactions designed to conceal the source and ownership of the illegal funds.“

This is not the first time US authorities seize BTC and other cryptocurrencies in a dark web operation. The most notable case was the arrest of the owner of now-defunct Silk Road – the biggest dark web marketplace at the time. US Government seized a staggering 80,000 BTC at the time and auctioned them from 2013 to 2014. Earlier this year, an auction of over 3,800 BTC was held by the US Marshal Service.

Image Source: “Flickr”

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I have been following the crypto markets since mid 2017, just in time to witness the incredible surge of the digital asset industry. Fascinated by the potential of blockchain technology I’ve started to dig deeper and that’s how I ended up meeting the Toshi Times team. I hold a Political Science degree, therefore the crypto regulation development is particularly interesting for me. I’m also heavily involved with music, running my own label, a YouTube channel and working with distribution. People call blockchain the ‘Fourth Industrial Revolution’ and I believe it will change our daily lives in the coming years and we will have the front row seats to witness it.