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As cryptocurrency and Bitcoin grow in popularity, the Secret Service has buttoned up efforts to crack down on fraudulent transactions. According to statistics from the agency, it has seized more than $102 million in crypto since 2015 across 254 cases.
One of the draws to cryptocurrency is how quickly funds are transferred compared to traditional transactions. However, the format also lends itself as an attractive vehicle for criminals and leaves consumers vulnerable.
Still, the blockchain allows for a certain degree of transparency, so through careful surveillance, illicit activity can be tracked down. “When you follow a digital currency wallet, it’s not different than an email address that has some correlating identifiers,” says David Smith, U.S. Secret Service assistant director of investigations. “And once a person and another person make a transaction, and that gets into the blockchain, we have the ability to follow that email address or wallet address, if you will, and trace it through the blockchain.”
Although the U.S. Secret Service is best known for keeping political leaders safe, it also actively monitors cybercrime.
Agents and analysts track global cryptocurrency from a secure room in the agency headquarters, carefully keeping tabs on potential fraudulent activity. Once suspicious behavior is spotted, they investigate further and deconstruct the details of the transaction. “What we want to do is to track that as quickly as we can, aggressively as we can, in a linear fashion,” Smith says.
Among the 254 cases was a fraudulent auction of luxury items that in reality were nonexistent. Victims received falsified invoices from the alleged companies, ensuring them that the transaction was real, and then their funds were converted into digital assets by the criminals behind the operation.
Another investigation found that a North Korean cybercrime group implemented a scheme to get victims to download fraudulent crypto applications on their devices, then used the illegitimate apps as an entry point to harvest data and gain access to private information.
As new forms of cybercrime continue to emerge, the Secret Service will continue monitoring suspicious activity.