IRS seized $3.5 billion in cryptocurrency this past year, agency says

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Nearly all of the money seized by the Criminal Investigation Unit of the Internal Revenue Service in the last fiscal year was in cryptocurrency, the agency said. announced Thursday – a strong indication of how common it has become in the criminal world.

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The unit seized $3.5 billion in cryptocurrency in non-tax investigations in the last fiscal year, which accounted for 93% of total seizures as of October 1, 2020-September. 30, 2021.

The report marks a sharp turn for the IRS towards bitcoin and other cryptocurrencies, where digital money has quickly become the dominant form of payment in criminal cases in which the agency confiscates funds.


Large cryptocurrency seizures have become the new normal for IRS criminal investigations, said Jarrod Koopman, executive director of the agency’s Cyber ​​and Forensic Services Division.

“It’s a big, big number,” he said. “Certainly we are seeing a change in our investigative work.”

While bitcoin had its heyday as the preferred currency for buying black market goods online almost a decade ago, it has since become a major investment vessel to some of the most powerful financial institutions in the world.

But bitcoin and other cryptocurrencies still play a major role in cybercrime, thanks to their ease of sending payments directly from person to person anywhere in the world.

Bitcoin is particularly popular among hackers who break into computer systems and then demand a ransom. October first Investigation The Treasury Department’s Financial Crimes Enforcement Network received a total of $590 million in bitcoin ransomware payments in the first six months of 2021 alone.

Much of the $3.5 billion figure comes from a handful of high-profile cases and the fact that the value of bitcoin has skyrocketed in recent years.

More than $1 billion of those funds came from more than 69,000 bitcoins linked to the Silk Road case, the first major law enforcement action of a darknet black market. IRS Hires Cryptocurrency Monitoring Firm Chainalysis track down And confiscate the bitcoin that was hacked and stolen from that site by someone who has not been identified. In November, the agency confiscated them again and they are now being accessed offline until they can be auctioned to the public.

Those bitcoins were valued at about $237 when Silk Road founder Ross Ulbricht was convicted in 2015, bringing the total to over $16 million.

An additional $10 million in confiscated money came from Volodymyr Kwashuk, a former Microsoft employee who was sentenced last year to nine years in prison for stealing virtual gift cards, then selling them for bitcoin. Which he then tried to launder.

The IRS criminal investigation could seize even more in cryptocurrency next year, Koopman said.

“We expect that to remain somewhat in that range, based on some of the investigations we are currently working on that are significantly larger in size and scope,” he said. “We could be on top of that figure next year.”

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