According to the agency, almost all the money recovered by the Internal Revenue Service’s Criminal Investigation branch during the previous fiscal year was in cryptocurrency, demonstrating how widespread it has become among criminals.
During the previous fiscal year, the IRS seized $3.5 billion in bitcoin in nontax investigations, accounting for 93 percent of its total seizures from October 2020 to September 2021, highlighting how criminals have embraced digital cash.
The Large Cryptocurrency Seizures
The IRS has taken a strong stance in favor of bitcoin and other cryptocurrencies, with digital money swiftly becoming the preferred method of payment in criminal cases when the agency seizes cash.
According to Jarod Koopman, the acting executive director of the IRS’s Cyber and Forensic Services division, large cryptocurrency seizures have become the new standard for criminal investigations.
He described the figure as a massive, huge number. We’ve seen a change in our investigative work.
While bitcoin had its heyday about a decade ago as the favored money for buying black market products on the internet, it has now evolved into a major investment vehicle for some of the world’s most powerful financial organizations.
However, due to its ease of moving money from one person to another anywhere in the globe, bitcoin and other cryptocurrencies continue to play a significant part in cybercrime. (Source: NBC News)
Why is Bitcoin Popular Among the Hackers?
Bitcoin is still quite popular among hackers who breach computers and then demand a ransom. According to an analysis released in October, the Treasury Department’s Financial Crimes Enforcement Network discovered $590 million in bitcoin ransomware payments in the first six months of 2021 alone.
A few high-profile lawsuits plus the fact that bitcoin’s value has risen in recent years account for much of the $3.5 billion.
Over 69,000 bitcoins left over from the Silk Road case, the first significant law enforcement raid on a darknet criminal market, accounted for more than $1 billion of the cash.
The IRS used the help of cryptocurrency tracking service Chainalysis to locate and collect bitcoin that had been hacked and stolen from that site by an unidentified individual. The agency seized them in November and is currently holding access to them offline until they can be auctioned off to the general public.
When Silk Road creator Ross Ulbricht was arrested in 2015, the bitcoins were valued at around $237 apiece, totaling well over $16 million.
A further $10 million was taken from Volodymyr Kvashuk, a former Microsoft employee sentenced to nine years in jail last year for stealing virtual gift cards and selling them for bitcoin, which he then attempted to launder.
According to Koopman, the IRS Criminal Investigation may take even more cryptocurrencies next year. (Source: NBC News)