$10 Billion in Crypto Crime Exposed by IRS Criminal Investigators

The Internal Revenue Service’s Criminal Investigation division closed last year with figures that underline how central digital assets have become to modern crime. 

According to its latest annual report, the unit identified more than $10 billion in financial crime, carried out over 1,400 search warrants, and seized assets worth hundreds of millions of dollars. The conviction rate remained among the highest across all federal law enforcement bodies.

Chainalysis highlighted these results in a recent update, noting that crypto investigations now sit at the core of IRS-CI’s work. Matthew Wilson from Chainalysis discussed these developments with Trevor McAleenan, an acting supervisory special agent, during Public Key Episode 176. 

McAleenan has worked on several landmark cases, including one that resulted in the seizure of more than $3 billion in Bitcoin, ranking as one of the largest financial seizures ever conducted by the US government.

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How Investigators Follow Money on the Blockchain

The IRS-CI has an easy rule that has not altered with technology advancements yet follows the money trail. This has altered the way the money trails will now end up to include Bitcoin, Ethereum, and stablecoins.

In the case of McAleenan, the officer claimed that in nearly all cases the cyber crime squad is now handling, cryptocurrency of one sort or another is invariably involved.

Starting from the recovery of over 120,000 Bitcoin in the case of the hack of Bitfinex to dismantling the dark net drug trade, in the majority of cases, the ledger trail is easier to follow than it is in the case of traditional banks.

It was imperative in cases that relate to Silk Road transactions, money laundering carried out by cartels, as well as fraud cases that were common during the time of the pandemic. Analysts employ strategic analysis of transactions that link digital wallets with actual human subjects.

Crypto Tracing Powers Major Darknet and Drug Investigations

The tasks performed by the IRS-CI do not only occur inside the United States anymore. Its operations extend around the entire world because it has offices in Europe, Asia, Australia, and the Americas.

Different organizations in the UK, Canada, Australia, and the Netherlands assisted it in increasing its efforts in combating transnational criminal organizations.

Some of the other activities the organization has undertaken in recent times include taking down darknet drug dealers in the US, as well as other international networks dealing in chemical precursors of fentanyl. These transactions included cryptocurrency payments.

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