With an active crypto criminal prosecution case, is Bitcoin no longer untraceable and anonymous?

By Ciaran Lyons
May 20, 2022 0

When people first started talking about Bitcoin just over ten years ago, it was for all the wrong reasons, mainly because of its involvement in illegal activity on the darknet.

Bitcoin was attractive to the underground world due to its reputation of being untraceable and anonymous.

Fast forward ten years, Bitcoin is now one of the top-performing assets in the world and growing faster than ever. According to data from the Bank of America, as of June 2021, an estimated 221 million users have traded cryptocurrencies or used a blockchain application, compared to 66 million up until May 2020.

So, how does this change the stealth reputation Bitcoin has of being untraceable and anonymous?

With the rapid growth of demand for Bitcoin around the world, law enforcement and government agencies are hiring the best of the best in technology to ensure they can be across illegal activity with cryptocurrency.

This was evident this week when The U.S Justice Department launched its first criminal prosecution involving the alleged use of cryptocurrency to evade U.S sanctions, as disclosed by a federal judge.

An American citizen has been accused of transmitting more than $10 million worth of Bitcoin to a virtual exchange in one of the five countries sanctioned by the U.S government. These five countries are Iran, Cuba, North Korea, Syria, and Russia.

The sanctioned country and the alleged citizen have not been disclosed.

The judge stated that cryptocurrency’s reputation for being anonymous is a myth.

The Justice Department has warned citizens they are actively going after those trying to conceal illegal activity with the use of Bitcoin through the use of experienced investigators and blockchain analysis tools.

“The Department of Justice can and will criminally prosecute individuals and entities for failure to comply with OFAC’s regulations, including as to virtual currency” U.S Magistrate Judge Zia M. Faruqui of Washington D.C said.


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