Bitcoin Forum

Criminals often express their favoritism toward cryptocurrencies. The perceived privacy and anonymity associated with this payment method makes for an excellent tool. In the US, the Treasury is now targeting Chinese drug kingpins. More specifically, they are monitoring Bitcoin revenue streams. That form of payment has become all the more prominent as time went by.

CHINA, DRUGS, AND BITCOIN

The vast majority of drugs and other narcotics consumed in the United States is not home-grown. It is often imported from countries such as Colombia, Mexico, and in a fair few cases, even China. Particularly where opioids are concerned, Chinese drug dealers are playing an increasing role of importance. They are also involved in shipping fentanyl analogues and cannabinoids, among other substances.

Several arrests were made in August of 2018. At that time, the US Attorney’s Office highlighted an indictment in federal court in Ohio. Two Chinese individuals – who are father and son – were charged with operating, manufacturing, and shipping various illegal substances. It is believed they served customer sin at least three dozen US states and over two dozen countries in total. It appears some of their business was conducted on the darknet, albeit exact details have not been provided as of yet.

Read More: https://themerkle.com/bitcoin-transactions-lead-to-international-drug-trafficking-rings-arrests/ (https://themerkle.com/bitcoin-transactions-lead-to-international-drug-trafficking-rings-arrests/)

More details are needed before we can comment on this news. I am not sure how the feds were able to track the Bitcoin transactions. Drug kingpins normally have tens of billions of USD worth of turnover per year, and they are not stupid to use payment methods that can be traced back to them. I am sure that the Chinese individuals in question here might have used Bitcoin mixers and other anonymity providers.

There is a good chance that they were traced when they tried to convert their BTC to cash. And this is the stage where more than 90% of the drug traffickers are caught. There are only a very few instances where the authorities actually tracked the Blockchain transactions to the individual. In most cases, the BTC to fiat conversion is the riskiest part for the criminals.

BTW, can someone confirm whether these two Chinese individuals were arrested from Ohio, or from outside the US?

If they would have had any clue for the next step(s) in order to catch the big boys, this wouldn't have gotten out to media.
They've caught 2 small dealers and ta-dam, Bitcoin, you know?

If they would not be so stupid to bash Bitcoin, they'd keep their mouth shut and go on. Bitcoin is pseudo-anonymous and a bad move can reveal your identity. That's a fact. But the more the news about "bad guys", Bitcoin and "caught", the bigger the chance they'll use anonymous coins. And then the law will have no choice on this direction.

This article has a clear contradiction. It speaks of the fact that they are using BTC as a tool of privacy and hence out of sight of governments. On the other hand, governments are monitoring these flows.


This is a weak argument. When there is no other reason to ban something we start to create fears about it so that people avoid.
I do not know what the real ratio is, but more people are speculating than the number who use BTC for dark activities.

That's very likely it. Even if they haven't been caught converting to fiat directly, the entities who end up receiving these tainted coins might try to convert their coins without realizing what they have been used for, and that's how law enforcement is a step closer to the actual criminals. Bitcoin is just a horrible tool to use for practices like these.

I actually believe that law enforcement is very happy with Bitcoin being so transparent. It allows them to solve cases that with a high degree of certainty wouldn't be solved if the criminals used cash. But then again, this isn't going to work for ever with how people slowly but surely figure out that there is no such a thing as anonymity when it comes to Bitcoin.

That's what I thought initially, but this doesn't really seem the case. Sure, there might have been a slight uptick in use of privacy focused altcoins, but more than that definitely not.

Privacy focused altcoins might be more private than Bitcoin, but they lack the acceptance that Bitcoin has, and that by orders of magnitude. It's not easy to find someone to accept your XMR or Zcash.

An aspect that might have contributed to this is that exchanges have slowly started delisting these coins because they want to become compliant. I can't see this chance at all.

The law enforcement authorities are able to trace back the transactions to the users, but if the mixers are used, then that makes their task a lot more complicated. And that is one of the reasons why they are trying to close down the Bitcoin mixers (or comically, trying to make KYC mandatory for all the cryptocurrency mixers, including Chip Mixer).

If anonymous coins such as Monero, Veil and Zcash had become more popular, then the usage of Bitcoin for such shady purposes could have gone down. Unfortunately, these coins remain far less popular than Bitcoin and recently those using them have faced difficulties in either selling or buying these coins. As a result the majority of the transactions in dark markets continue to use BTC.

Do you have a source that says authorities are trying to close down mixers?

Anyway, the source itself doesn't say that their Bitcoin transactions led to their arrests, so I feel like this article is just making assumptions here. All that has been mentioned is that the suspects are known to use Bitcoin for laundering money, among many other methods. Certain addresses have been blacklisted (https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20190821.aspx) too, though I have no idea what implications that brings.

Do they really think that all illegal activities will seize if Bitcoin is banned? What did these drug cartels use before Bitcoin came on the scene? They used "cash" because it was also a anonymous currency and they will still use cash, because it is even more anonymous than bitcoins.

Yes, cross border payments are easier with Bitcoin payments, but it leaves a paper trail that might be followed, when the law enforcement agencies figure out how the technology can be forensically handled.  ;)

                                                              Give them enough rope to hang themselves.

What is so clear with this news about an event that happened last year is the proven fact that Bitcoin is not a private coin and therefore all the transactions in the network can be seen by anyone interested enough to dig and click some links. I am sure those Chinese nationals arrested and proven guilty are not educated on Bitcoin or the use of cryptocurrency and most probably they were not aware that there are actually private cryptos they can use and not Bitcoin. People who still think that Bitcoin is the way for criminals to cover their tracks probably are not informed well or maybe living in the caves for a long time.

The DarkWeb mostly works with BTC so they infact are so stupid to use traceable payments methods. You already told us and yourself where the weakest points are - mixers and fiat to btc txs. There is no way to escape that especially when working with large amounts of BTC.

The article mentioned bitcoin as not private nor anonymous, however, it is perceived to be. It is not the article's fault that the clear contradiction is the 2 Chinese individuals who want private transactions but used bitcoin hehehe.

Bitcoin is technically "pseudoanonymous" but most people treat it like Monero for some reason...

That's because of how the mainstream media labels Bitcoin as THE currency to conduct transactions anonymously. In most cases it's accompanied by a lengthy article where they explain that criminals have used Bitcoin either to launder money or buy drugs and whatnot. If criminals use Bitcoin, then it surely is anonymous, right?

No one would give a damn if the mainstream media referred to XMR because people don't know what the heck that thing is. Bitcoin is known to most people as household brand.

@1Referee. Agreed. However, I reckon most of us thought bitcoin was anonymous when we came in here? We might also not be the last hehe.

On the one hand, this is good and will help catch many more drug dealers and arms dealers, but doesn't it make crypto less decentralized?

Providing in behalf of byrant.coleman

https://cointelegraph.com/news/cryptocurrency-mixers-and-why-governments-may-want-to-shut-them-down

They are cracking up mixers due to this reason where it do makes more hard for them to traced up tainted coins with these mixing services.
We already seen some being sampled out and some do voluntarily closes down just like Bitblender due for this reason.

As usual into these kind of incidents when in come to illegal aspect and suspect being caught.Bitcoin is always been dragged down and actually not a surprising thing.

@Lanatsa. I predict 2 positive effects for successful government shutdowns of all mixers. It will begin the anonymous coin revolution and it might make bitcoin unattractive for criminals which makes it more attractive for today's more skeptical investors.

Many thanks for posting this. Apart from Bitblender, many other Bitcoin mixers are also facing the heat from the authorities. Currently the biggest Bitcoin mixer in active service (Chipmixer) is having issues with the authorities after it was established that the Binance hackers used their services to wash at least BTC5,000 of the stolen Bitcoins.

I guess the first large-scale Bitcoin mixer to close down was Bitmixer.io. At that time, they were saying that the closure is due to issue within the Bitcoin algorithm, which makes maintaining anonymity difficult. And one example of a mixer closed down by the authorities is that of Bestmixer.io. They were forcibly closed down by the Fiscale Inlichtingenen Opsporings Dienst (FIOD) of the Netherlands.

@nulltxmark


why are you making more than 1 thread about negative news stories?

talk

SHUM

This a very sensitive issues this not a joke accusing bitcoin use into drugs transaction is very serious matters. I agre for sir bryant.coleman statement difficult to give comment about this isaues because harder to trace digital currency transeactions as evidence to against drugs crimes.

Bitcoin is already becoming quite unattractive for the criminals, as a lot of them are getting caught while converting the "dirty" coins back to fiat cash. For a while, anonymous coins (such as Monero, Zcash and Deep Onion) were being talked about as the preferred payment method in the dark web, but these coins never made it due to their low liquidity. I guess the criminals will soon go back to their old modes of payment (i.e those using fiat cash). Physical cash remains the most anonymous method of payment even now. 

And it doesn't work on darknet markets, which clearly aren't going away (https://news.bitcoin.com/despite-setbacks-darknet-markets-show-continuous-growth-in-2019/). DNM vendors need to accept bitcoin because it's what customers demand vs. privacy coins. As for fiat money, it doesn't carry much value on the dark web (https://bitcointalk.org/index.php?topic=5184902.0).

I haven't really had the impression that Bitcoin is becoming unattractive to criminals. Some dumbos indeed have busted themselves by cashing out through KYC exchanges, but a lot of what we see in terms of usage is Bitcoin that continuously gets circulated without the coins being converted to fiat.

The great thing about Bitcoin is that there is always someone who is willing to accept it, which can't be said about altcoins. I'm pretty certain that EVERY cryptocoiner will accept Bitcoin, while with altcoins you'll see that it's quite difficult to get rid of, even when it comes to privacy coins on dark markets. People use the most adopted coin, even when it's lacking in the privacy field.

Physical cash is great for offline payments but sucks balls when you try to transact online. It's pretty much useless there.

See? Everything is perfectly falling into pieces. In my country, the local news always report failed drug deliveries and deal from other countries that has been done using cryptocurrencies especially bitcoin. Like what are they thinking? Bitcoin is still trackable and second is that the shipment is still going to be inspected at the arrival so they are just basically making it easy for the police to find them.