Cryptocurrencies have become the enterprising cybercriminal’s best friend, offering easy conduits for moving money. From white collar scams to drug deals, crypto-related crime is rising. According to Jonathan Levin, the co-founder of blockchain startup Chainalysis, at least 95 percent of crypto-related crimes investigated by authorities involved Bitcoin.
Levin, whose company monitors transactions and follow the money of nefarious types on the blockchain for government agencies such as the FBI, said that Bitcoin (BTC) is still well-entrenched as the preferred payment for cybercriminals. He urged the US government to focus on the crackdown on illicit activities which occur on the dark web. Also, he sounded an alarm about terrorists using cryptocurrencies. They exploit the anonymity offered by blockchain for finances and fundraising.
“What we’ve seen is that there is the ability to tie some of those cryptocurrency transactions either to the pharmacies in China or actually to the services that people are using to distribute fentanyl.”
Levin added that it has become easier for the investigators to build a strong case against suspects thanks to the transparency of cryptocurrencies. Investigators are also no longer required to rely on obtaining transaction records from both local and foreign financial institutions.
Although Bitcoin is still criminals’ favorite virtual currency for illicit activities, Levin stated that his company has started to monitor transactions for ten altcoins, including several stablecoins, as investigators are trying to investigate hacks on cryptocurrency exchanges where other coins are stolen.
Levin also revealed Chainalysis had launched investigations on Canada-based crypto exchange QuadrigaCX which disappeared with almost $200 million of customer fund. He told Fortune in an interview:
“We were looking at the bitcoin holdings and also tether holdings of Quadriga and what we found very quickly was that Quadriga as an exchange actually didn’t have those customer funds that were reported in the media to be lost. Those funds actually never existed.”
He also reiterated that two hacker groups are responsible for stealing an eye-watering $1 billion in digital assets.