Cryptos seizure surges as cybercrime escalates

By Raffaele Redi

The most recent case saw the Australian police seizing almost $8.5m in cryptocurrency

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Cybercrime is one of the fastest-growing transnational crimes – Photo: Shutterstock
                                

With cybercrime becoming one of the fastest-growing forms of transnational crime, authorities and police forces around the world are seizing more and more cryptos – in particular bitcoin.

This year, in the US alone, $1.2bn (£874.5m) of cryptos have been seized; cryptos have also been seized in other countries. According to a CNBC report, in June, the US government auctioned off $21,000 worth of cryptocurrencies including bitcoin, bitcoin cash and litecoin as part of a tax non-compliance case.  

Jarod Koopman, director of cybercrime at the Internal Revenue Service’s Criminal Investigation Division, told CNBC: “In the fiscal year 2019, we had about $700,000 worth of crypto seizures. In 2020, it was up to $137m. And so far in 2021, we’re at $1.2bn.”

The Australian case

In a recent case, the Victoria police in Australia seized nearly AUS8.5m ($6.1m) – an Australian law-enforcement record – in cryptocurrency as part of an ongoing investigation into online drug trafficking.

The arrests and seizures were carried by the Australian Cyber Crime Squad and Criminal Proceeds Squad as part of an investigation into drug trafficking on a dark web platform that dates back to 2012. The investigation is ongoing. 

“This is the 21st century version of drug trafficking and money laundering, with criminals using technology to enable immense amounts of community harm and misery,” said Commander Mick Frewen, Victoria Police Crime Command.

“Police actively work on these forums and receive information from a wide range of sources including our Australian and international law enforcement partners,” he added.

The Swedish mistake

In Sweden, the government was forced to reimburse a convicted drug dealer around $1.5m after the Swedish Enforcement Authority auctioned off 36 bitcoins he had amassed through illegal online activities.

According to The Telegraph, which first reported the story, the Swedish authorities sanctioned the unnamed man with a SEK1.3m ($149,197) fine – more or less the value of just three bitcoins at the current exchange rate.

However, at that time, the authorities didn’t consider bitcoin’s volatility and sold all of the cryptos as compensation for his criminal activities. As a consequence, they must now by law return the value of 33 of the original 36 BTC to him.

Cybercrime around the world

According to a statement from Interpol: “Cybercrime is one of the fastest-growing forms of transnational crime. While rapid growth in Internet and computer technology has enabled economic and social growth, an increasing reliance on the internet has created more risks and vulnerabilities, and opened new possibilities for criminal activity.”

Among the types of cybercrime highlighted by Interpol is cryptojacking – a kind of malware that infects computers to use them to mine cryptocurrencies usually without users’ knowledge.

Further reading: Bitcoin price analysis (23–29 August): can the rally continue?

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