US Govt. Seizes $20M in Crypto in Darknet Arrests

Although the general conversation about cryptocurrencies seems to have shifted away from concerns about its potential use in the darknet and more toward mainstream opportunities and applications, a recent bit of news about sites like Silk Road is a reminder of the illicit potential inherent in decentralized and anonymous tokens. U.S. authorities have reportedly completed a yearlong undercover operation on the darknet, according to The large-scale operation successfully uncovered the true identity of more than 50 vendors on darknet marketplaces like Silk Road, Hansa and others. In the process, more than 35 people have been arrested to date, and goods and tokens worth more than $23.6 million have been seized.

More than 100 enforcement actions led to the seizure of goods and virtual tokens worth close to $24 million up to this point. The goods included illicit drugs like fentanyl, cocaine and more, as well as firearms and about $3.6 million in gold bars and fiat currency. Significantly, the haul also included roughly 2,000 BTC and numerous other cryptocurrencies, with a total value of more than $20 million. Bitcoin mining devices and equipment were also included in the seizures.

Acting Executive Associate Director for Homeland Security Investigations Derek Benner explained that "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." The results of the operation show that bitcoin and other digital currencies clearly played a crucial role in the funding of these operations and their continued evasion of law enforcement up to the conclusion of the operation as well.

DOJ, HSI, DEA and Others Cooperate

The operation reportedly involved several different law enforcement agencies, including the Department of Justice, the Postal Inspection Service and the Drug Enforcement Agency. Agents posed as money launderers on darknet market sites, offering to exchange fiat currency for digital tokens. U.S. Secret Service Assistant Director Kenneth Jenkins suggested that "the Secret Service is proud to work with our law enforcement partners to help combat one of the largest threats to the U.S. financial infrastructure, money laundering with virtual currency." Jenkins continued by saying that the agency "continues to adapt along with these cyber criminals to maintain our level of success in stopping them."

Investing in cryptocurrencies and Initial Coin Offerings ("ICOs") is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns bitcoin and ripple.

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