In a strange move, the Miami Fed has announced the seizure of $35M worth of BTC (about 710 BTC using the rate as of this writing). The BTC was seized from a Parkland resident who is allegedly receiving BTC payments for selling users’ private data.
Selling User Data Illegally To Earn BTC
The accused had formed the habit of selling user account data from popular firms such as HBO, Netflix, and Uber to willing buyers through the dark web. The Miami Fed affirmed that the alleged criminal has been in this business for about five years with more than 100K transactions under his belt.
Per the Miami Herald, “a joint task force between the FBI, IRS and homeland security resulted in unmasking the fraudster behind operation tornado. Four Miami Fed prosecutors filed the case.” As of the time of the report, the suspect hasn’t been charged with any criminal offense due to insufficient evidence.
When the charge was filed last October, the suspect’s crypto holdings were valued at $75m. It has to be noted that this value would have dropped since the market has been in correction between that time and now.
Running The Dark Operations Through The Tor Browser
The dark web is so-called because it is notorious as a “hub of anonymous users willing to explore opportunities or access premium services and products at little or no costs,” These dark web users usually use the tor browser. This browser ensures that user activities (especially fraudulent transactions) through it are completely untraceable.
The Miami Fed alleged that this parkland suspect used the tor browser for his operation of selling private user info to the highest bidder. The security agents also alleged that the suspect used the ‘tumblers’ app (a crypto mixing app) to ensure that he could move the digital currencies without any trace or identification as stolen funds.
Thus, this suspect laundered the BTC successfully among exchanges without being traceable. Hence, he is guilty of contravening the US anti-money laundering policy. Even though the suspect is yet to challenge his seized funds, the case is already filed as a civil case.
The Authorities’ Increased Efforts In Fighting Crypto Frauds
Over the last couple of years, authorities have struggled to track stolen crypto funds. But, it appears that the authorities have found new means to trace these stolen crypto funds. This is reflected in the number of crypto seizures that the government has made this year alone. The government has made more BTC seizures than in previous years combined.
Two months ago, the US DoJ successfully confiscated $4.6B worth of crypto, stolen from an exchange six years ago. Authorities in other regions (particularly Europe) have also made headway regarding the tracking and seizure of stolen crypto funds to make the crypto space safe for investors.
Hackers have also been doing a lot of harm in the DeFi sector. They seem to have up their game since this year began. A recent report by Immunefi (a bug bounty platform) revealed that hackers had stolen more than $1.23B from the DeFi market since the beginning of this year.