For many cybercriminals, it has been an article of faith that Bitcoin is preferable to conventional currency in obtaining fraudulent or extortionate payments because Bitcoin is untraceable. In recent weeks, however, law enforcement authorities in the United States and the United Kingdom have demonstrated that Bitcoin transactions, though anonymous while making their way through the blockchain, are indeed traceable.
On June 8, the U.S. Department of Justice announced that it had seized 63.7 bitcoins, valued at more than $2.3 million, that were part of the ransom that Colonial Pipeline paid to its ransomware attackers. Shortly thereafter, on June 24 the London Metropolitan Police (Met) announced that it had seized £114 million – then the largest cryptocurrency seizure in the United Kingdom – in connection with an international money laundering investigation.
On July 13, the Met announced that it had set a new record for UK cryptocurrency seizures, with the seizure of nearly £180 million. The Met indicated that this seizure was connected with the same investigation in which the £114 million seizure took place. The focus and direction of that investigation are still unclear. The Met reported, however, that a woman who had been arrested in connection with the £114 million seizure was “interviewed under caution” in relation to the discovery of the £180 million of cryptocurrency that was seized.
These incidents are significant accomplishments for law enforcement. They may also be, for more astute cybercriminal organizations, a signal that they need to change their money laundering strategies. Law enforcement, as well as anti-money laundering teams at financial institutions, will need to watch for such changes, which may include switching to other widely-recognized cryptocurrencies, more rapid extraction of funds from the blockchain, greater use of financial institutions in higher-risk jurisdictions to do so, and tighter controls over the criminals’ private keys. In the meantime, law enforcement should take full advantage of the techniques it has developed to pursue crypto-related money laundering on a broader front.
Dipping Through Geometries 