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As cryptocurrency and Bitcoin grow in popularity, the secret services have stepped up their efforts to crack down on fraudulent transactions. According to statistics from the agency, it has seized more than $102 million in crypto since 2015 in 254 cases.
One of the attractions of cryptocurrency is the speed with which funds are transferred compared to traditional transactions. However, the format also lends itself as an attractive vehicle for criminals and makes consumers vulnerable.
Yet blockchain allows for a degree of transparency, so that with careful monitoring, illicit activity can be tracked down. “When you track a digital currency wallet, it’s no different than an email address that has correlated identifiers,” says David Smith, deputy director of investigations for the US Secret Service. “And once a person and another person make a transaction, and that goes into the blockchain, we have the ability to track that email address or that wallet address, if you want, and trace it back to through the blockchain.”
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Although the US Secret Service is best known for keeping political leaders safe, they also actively monitor cybercrime.
Agents and analysts track the global cryptocurrency from a secure room at the agency’s headquarters, carefully monitoring potential fraudulent activity. Once suspicious behavior is spotted, they investigate further and deconstruct transaction details. “What we want to do is follow that as quickly as possible, aggressively, linearly,” Smith says.
Among the 254 cases was a fraudulent auction of luxury items that in reality did not exist. The victims received falsified invoices from the alleged companies, assuring them that the transaction was real, and then their funds were converted into digital assets by the criminals behind the operation.
Another investigation revealed that a North Korean cybercrime group set up a scheme to trick victims into downloading fraudulent crypto apps onto their devices, then used the illegitimate apps as an entry point to harvest data and access private information.
As new forms of cybercrime continue to emerge, the Secret Service will continue to monitor suspicious activity.
Related: Secret Service Agent’s Guide to Protecting the C Suite From Hackers