The bust resulted in the seizure of opioids, cocaine, over 100 guns and assault rifles, a grenade launcher, five cars, and almost $24 million worth of gold, cash, Bitcoin as well as other cryptocurrencies.
“Criminals who think that they are safe on the dark net are wrong,” said deputy attorney general Rod J. Rosenstein. “We can expose their networks.”
Homeland Security agents went undercover online as money launderers working with virtual currencies.
“Special agents were able to walk amongst those in the cyberunderworld to find those vendors who sell highly addictive drugs for a profit,” said Homeland Security Investigation’s Derek Benner. “[Homeland Security Investigations] has infiltrated the dark net.”
The captured suspects came from all across the United States, aged mostly in their 20s and 30s, and sold opioids, cocaine, meth, and marijuana on the web.
One thing many of them shared was the acceptance of Bitcoin as payment for their products. Bitcoin may seem like an obvious choice of currency for nefarious dealings, being independent of government controls as well as being hard to track as it is transferred from one anonymous user to another.
However, to hold all bitcoin users accountable, every transfer is recorded in a ledger that, while hard to understand to the average person, is pretty much an open record of everyone who has ever laid hands on that bitcoin. With time, law enforcement will be able to reliably track bitcoin transfers, some cyber security experts say.
This marks a departure from the old strategy used by authorities to crack down on online crime: going after the managers of the trade platforms. In 2015, authorities shut down the online bazaar Silk Road and prosecuted the owner and founder, Ross Ulbricht, also known by his online nickname “Dread Pirate Roberts.” He is now serving a life sentence.
But the lure of an anonymous online drug market remains, evidenced by the myriad cryptocurrencies arising that are made expressly for difficulty in detection.
“Some newer cryptocurrencies have features that make the tracing of them quite complicated,” said Greg Nevano, an ICE official who investigates cryptocurrencies. “These new anonymity-enhanced cryptocurrencies are clearly ripe for illicit use in an effort to subvert legitimate law enforcement inquiries.”