Report Claims the FBI Uses Bitcoin Mixers During BTC Forfeiture Processing – Bitcoin News
US law enforcement agencies have seized large amounts of bitcoin over the past eight years, and the Federal Bureau of Investigation (FBI) at one point held one of the largest bitcoin portfolios since the Silk Road takeover. A recent report shows that the FBI has recently started shuffling cryptocurrencies to mix transactions with seized bitcoins resulting from seizures.
Do as I say, not as I do.
The U.S. government is far from transparent, and a recent report shows just how shady federal agencies can be these days. Author Joshua Davis describes in detail how the FBI circumvents transparency and accountability just when law enforcement has seized resources. For years, the FBI, US Department of Justice (DoJ) and FinCEN have argued that the use of bitcoin shufflers should be criminalized.
Federal authorities have gone after the operators of large centralized bitcoin shufflers, accusing them of illegally transferring money because the shufflers would facilitate the commission of crimes. Nowadays, cryptocurrency shufflers are less centralized and bitcoin shufflers can be used that are embedded in a cashless wallet. Davis explains how FinCEN criminalizes bitcoin shufflers and anyone who uses them can be charged with violating anti-money laundering laws. The report also describes how the FBI regularly uses bitcoin shufflers and how it has been doing so for several years.
The report shows that the FBI seized 39.67 BTC from a man in Tucson, Arizona. The case involved an unauthorized exchange of SIM cards. According to Davis’ findings, the FBI sent updated information to victims, giving the impression that the cryptocurrencies had already been sold. However, the blockchain data shows that this is not the case and the victims were informed that a clerical error had been made.
FBR Bitcoin miners 4700% overpaid
Interestingly, Davis’ findings show that the blockchain tells the story of transactions sent to itself by the Fed, from an address that sent over 800,000 transactions, and funds from an address that sent over 43 million BTC. First signs that bitcoin shuffler is being used to defraud bitcoin transactions.
To be clear, the FBI does not need a money transmission license to act as a legitimate Bitcoin tumbler, as government agencies are exempt from obtaining a Money Services Business (MSB) license, Davis said in his report. Instead, I would humbly point out that the law requires that resources be protected from waste, loss, unauthorized use or misappropriation. With regard to these four things to be wary of, Mr. Davis noted that the term waste seems to have been chosen instead of transparency.
Davis suggests that the FBI may have overpaid bitcoin miners by 4700%, and the fees are huge when multiplied by a factor of 2 or 5. The report concludes that Davis has no problem or real thing against the FBI as a whole, but that he doesn’t appreciate hypocrisy.
I just hate the feeling of being treated like a child who needs to stop complaining and trust authority, the author writes. Yes, we must trust authority figures, but they must earn our trust. The authorities should also do their utmost to be as transparent as possible.
Former US police officer Sean Bridges and Carl Seal. The results indicate that the 69,370 bitcoin from Silk Road recently seized by Person X indicates that the unknown person was most likely Shawn Bridge.
The author also points out how former Drug Enforcement Administration agent Carl Force and former Secret Service agent Sean Bridges stole money in the Silk Road case. Force managed to steal 1,200 BTC and Bridges stole 3,100 Bitcoins. They could have gotten away with it if they had taken an extra precaution, Davis said. Their mistake is that they didn’t use bitcoin shuffler.
In addition, a spokesperson for the FBI emailed the author of the report for clarification: The FBI specifically stated in an email that the funds were still stored in bitcoin. They are required by law to hold these funds in the form of bitcoins and not convert them into cash.
What do you think about the FBI using bitcoin sliders to defraud transactions? Tell us what you think in the comments below.
Photo credit: Shutterstock, Pixabay, Wiki Commons, Joshua Davis/Coinmonk
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