Cryptocurrency increasingly used in drug and human trafficking

Cryptocurrency: Everyone is talking about it.

From Dogecoin to Bitcoin, investors are using it to expand their portfolios. And platforms, such as Coinbase, make debit cards that allow you to spend money.

But that’s just the surface of how money is used. Dig deeper into the web and you’ll find dark applications.

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

“We found that the devices were being used to facilitate or participate in online drug trafficking and online sex trafficking,” she said.

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

“Virtual currencies may not have been used to pay for the sex trade itself, but they may have been used to pay for the platforms or the placement of the ads,” she continued. “For drug trafficking, we discovered that it was used as a means of payment. The anonymity nature of this virtual currency is such that secrecy and confidentiality is maintained and therefore you can transact with these currencies, and no one will ever have a good idea who you are.

Goodwin’s team worked with a number of agencies, including the Department of Justice and the Postal Inspectorate, to determine who is criminally using crypto.

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

No more big money bags and drops. Criminals can now transfer large sums of money easily and anonymously via a kiosk – a machine similar to an ATM. And using a terminal is not a suspicious act.

“Virtual currencies are not illegal,” Goodwin continued. “So when you’re in a booth, nobody really knows what you’re doing in that booth. It’s just hard to follow.

Newsstands must be registered with the Financial Crimes Enforcement Network, but their locations are not required 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,” Goodwin said. “Physical addresses could enhance the information law enforcement officers would not have to identify the source of these transactions.”

Identifying sources is key to tackling illegal cryptographic activities.

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

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