Cryptocurrency increasingly used in drug and human trafficking

Cryptocurrencies: Everyone is talking about it.

From Dogecoin to Bitcoin, investors use it to expand their portfolios. And platforms, like Coinbase, are creating debit cards that allow you to spend like cash.

But this is only the surface of how the money is used. Dig deeper on the web and you will find more obscure uses.



Gretta Goodwin, director of the Homeland Security and Justice Team at the Government Accountability Office, analyzes law enforcement issues in the digital space.

“We found that the devices have been used to facilitate or engage in online drug trafficking and online sex trafficking,” he said.

Goodwin’s team focuses on cryptocurrency and law enforcement’s ability and preparedness to track down and arrest criminals.

“Virtual currencies may not have been used to pay for sex trafficking per se, but they may have been used to pay for platforms or ad placement,” he continued. “For drug trafficking, we found that it was being used as a form of payment. The anonymous nature of these virtual currencies is such that secrecy and confidentiality are maintained and therefore you can transact with these currencies and no one ever has a good idea of ​​who you are.

Goodwin’s team has worked with a number of agencies, including the Department of Justice and the Postal Inspection Service, to identify who is using cryptocurrencies in a criminal way.

“They told us how drug cartels and transnational criminal organizations are using more and more virtual currencies because of their perceived anonymity and because it is a more effective method of hijacking money across international borders,” he said. “When we looked at the suspicious activity reports for the 2017-2020 period, we looked at how often virtual currency has appeared in those reports. These deposits have quadrupled during this period. So we know that virtual currency is increasingly being used for engage in this type of business.

No more big bags and drops of money. Criminals can now use a kiosk, an ATM-like machine, to transfer large sums of money with ease and anonymity. And using a terminal is not a suspicious act.

“Virtual currencies are not illegal,” Goodwin continued. “So if you’re in a booth, no one really knows what you’re doing in that booth. It’s just hard to follow.

Kiosks must be registered with the Financial Crimes Enforcement Network, but their locations do not need to be disclosed.

“One of the recommendations we made was that the agency pay more attention to the location of these kiosks, which would help law enforcement better understand where these transactions might take place,” said Goodwin. “Physical addresses could improve information that law enforcement is not supposed to identify the source of these transactions.”

Source identification is the key to cracking down on illegal cryptographic activity.

“If they don’t have the data, they can’t effectively target their resources,” said Goodwin. “Federal agencies have taken steps to tackle the illicit use of virtual currencies in human and drug trafficking … but they still face significant challenges. “

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