CIA Involved With Crypto as Chief Discloses His Agency Working on "a Number of Different Projects"

Written by:
Alejandro Botticelli
Published on:

CIA chief William Burns admitted this week that the intelligence agency has been working on "a number of different projects" pertaining to the cryptocurrency space.

“This is something I inherited,” Burns told the audience at this week's Wall Street Journal’s CEO Summit. “My predecessor had started this, but had set in motion a number of different projects focused on cryptocurrency and trying to look at second- and third-order consequences as well and helping with our colleagues in other parts of the U.S. government to provide solid intelligence on what we’re seeing as well.”

Federal law enforcement agencies working with cryptocurrencies and blockchains?  Who would have thunk it?

Not a shock to those of us covering October's CoinGeek NYC conference, which featured among its panelists former and current federal agents including Richard G. Reinhardt Special Agent, IRS Criminal Investigation.

CoinGeek endorses the BSV Blockchain and is committed to eradicating criminal activity on its network.  BSV is backed by Bitcoin's founder and author of The White Paper, Dr. Craig "Satoshi" Wright.  A Miami jury officially confirmed Wright's role in the creation of Bitcoin this past week.

"It's no mystery to anybody that cryptocurrencies are becoming popular with criminals," Reinhardt said back in October.  "Where we get involved in that is more on the peer-to-peer side.  Also we are doing a lot of Bitcoin ATMs, trying to find the bad guys using those.  We have guys involved with ransomware cases trying to track the payment for those."

A vast majority of these "bad guys" are involved in the sale of deadly Fentanyl, as Reinhardt went on to explain.  His agency has made it a top priority to go after Fenyanyl sales first and foremost, followed by romance schemes and the defrauding of the elderly.

"It's not like we just go into a bank account and we can see anything that we want.  There is a lot that happens to get to that point but one example I will give you is we will get information from an attorney's office.  They do closings, there were emails compromised, and the wires will be directed.  We'll follow that money into a bank account and see how that individual uses it. 

"So I will give you an example of a guy who was on Facebook advertising (that) he buys and sells Bitcoin.  We tracked these business compromises to his account, so then we get the bank account, we analyze the deposits that look suspicious in there and then we do some 'covert' stuff to get to that guy, whether it's send in a confidential informant or one of us to try to do business with that guy and try to engage him and try to get the wallet addresses."

As early as 2013, Internal National Security Agency documents from 2013 leaked by Edward Snowden showed that “tracking down” users of Bitcoin was one of the CIA's top priorities.

For the offshore sports betting world, Bitcoin's place in the nefarious criminal world reared its ugly head after kidnappers demanded - and got paid - a $750,000 ransom in the form of Bitcoin for the safe return of one Sean Creighton.  He was the founder of 5Dimes in San Pedro Costa Rica. Around a dozen suspects were later apprehended with at least one appearing to have ties to online gambling enterprises based out of Malta.  Creighton's body was found a year later buried in an unmarked grave in Quepos.

The BSV Blockchain has made it abundantly clear they will have none of these shenanigans on their respected network. They recently launched a multi-million dollar crime bounty in an effort to apprehend undesirables, including those targetting their own platform. 

Back in August it was announced that the the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) was redoubling its efforts to disrupt crypto-based money laundering efforts by partnering with financial institutions and other industry stakeholders to trace the proceeds of cybercrime.

Cryptocurrency is a valuable tool to those the CIA might be helping keep track of, including the aforementioned ransomware gangs Special Agent Reinhardt alluded to at CoinGeek NYC.

Everybody has a role in combatting crypto crooks, Reinhardt says.

The idea that businesses could plead ignorance as to the origins of money flowing through their systems will no longer fly.

BlockTrace founder and CEO Shaun MaGruder, also speaking at CoinGeek NYC, said that exchanges need to get proactive about disabling dodgy accounts, because if he can see the same wallet address being responsible for 40 transactions from Russia’s Hydra dark market, then so can the exchange that receives those transfers.

MaGruder'a firm has built an API aggregation layer called Fusion that incorporates data from tracking firms such as Cybertrace, Elliptic and others to effectively perform “compliance on the entire blockchain.”

Patrick Thompson of CoinGeek cited the coronavirus pandemic as one of the main facilitator of digital crimes.  He notes that, "while most of the world’s population spent an increased amount of time on the internet due to the pandemic and the lack of establishments that remained open, criminals turned to cybercrime because there was a larger pool of people they could target".

He warns that cybercrime is continually evolving beyond the pandemic.

"Contrary to popular belief, Bitcoin is not the private network that many criminals and illicit actors believe it to be," Thompson adds.  "Bitcoin is public, transparent, and immutable."

- Alejandro Botticelli, Senior Correspondent

Business/Financial News

UK Rejects Proposal to Regulate Crypto Like Gambling

"A system of gambling regulation, in isolation, would be unlikely to address these risk factors. It would also not be equipped to deal with insider dealing, market manipulation, predatory short selling and many other behaviours which can manifest themselves in both cryptoasset markets as well as traditional financial services markets."