Want to keep financial transactions hidden from law enforcement? The U.S. Secret Service has some analog advice: “Use cash.”
The agency, along with a California criminal task force, dished on how they solve crypto crimes in a lengthy “Ask Me Anything” session on Reddit, giving insight into "pig butchering" scams, the Secret Service’s NFT collection and the best way to keep transactions hidden from law enforcement.
The Secret Service’s San Francisco Field Office, along with the Bay Area Regional Enforcement Allied Computer Team, answered questions on the r/CryptoCurrency subreddit for two hours on Monday in an effort to educate crypto users.
Although crypto might be the currency of choice for some thieves and Ponzi schemers, the officials said the blockchain can actually be a gold mine for tracking financial crimes.
“The blockchain provides us with an amazing opportunity to track the flow of money,” the REACT task force said.
The officials are taking action after last year achieved a record for crypto hacks. Globally, nearly $776 million was stolen in 32 separate attacks, mainly on decentralized finance (DeFi) protocols, according to Chainalysis data.
Bitcoin white paper ‘required reading’ for Secret Service agents
Along with protecting U.S. leaders, the Secret Service also guards the country’s financial infrastructure. The agency’s San Francisco office has a group of special agents and analysts dedicated to crypto crimes, and said the Bitcoin white paper is “required reading for any new agents on our squad!”
REACT is a task force of local detectives and federal partners established by the California legislature in the late 1990s to handle “high tech crimes.” The team has focused on so-called pig butchering crypto thefts — in which a scammer gains the trust of the victim and then steals cryptocurrency — and says it has recovered millions in stolen funds.
“We CAN and DO recover funds and return them to victims,” REACT said, noting it has returned stolen crypto to 17 victims in the last nine months.
The Secret Service assured Redditors that law enforcement has tools to monitor crypto as robustly as it does traditional finance. That said, the agency noted that the portion of money laundering done in crypto is smaller than the money laundering that happens in fiat currency, according to a U.S. Treasury Department report from last year.
Secret Service finds crime victims on Reddit
Beyond handling crypto crimes and recovering funds, even finding victims can be challenging for law enforcement. The Secret Service said it found a victim on Reddit who had posted about an investment scam but did not report it through official channels like the the Internet Crime Complaint Center, also known as IC3.
“Every case is different, but no hope if you don't report,” the Secret Service said. “True story — we came across a victim that reported their pig butchering on Reddit, but not IC3 or police. We had to reach out via Reddit to get the victim to file an IC3 report. That victim will get their money back as a result.”
The Secret Service has an NFT collection
Some questions and answers were a bit more lighthearted on the forum. One Redditor asked whether law enforcement can track transactions on Monero, the cryptocurrency that uses a privacy-focused blockchain. Another user chimed in, saying they’re able to track it. “Call me,” the Secret Service replied.
Another Reddit questioner asked the Secret Service if it had ever considered releasing a token or memecoin, addressing the agency as “Mr Secret.” The Secret Service plugged the NFT collection it created and minted last year. It features agents in San Francisco locations including Alcatraz and Chinatown.
“We try to learn as much about the various digital assets in this space,” the Secret Service said, signing the message as “Mr Secret.”
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