According to a report released by the Internal Revenue Service (IRS), crypto assets are a major factor in criminal investigations.
Criminal Investigations team seizures of cryptocurrencies involve 93% of all seizures conducted. The team seized crypto worth $3.5 billion in total.
The Criminal Investigations team has been working to combat financial crime for the last six years and has developed a dedicated division called the Cyber Crime Unit, which addresses the "exponential growth" of cybercrime.
Almost all of these crimes involve the use of cryptocurrencies as a means of facilitating criminal activity, the IRS stated in its report.
Some far-right extremists have raised millions of dollars via crypto, Russian intelligence-backed companies have funded election meddling campaigns with crypto, and even police agencies have attempted to crack privacy coins in a Swedish missing person case.
According to the IRS, crypto-related seizures accounted for some of the organization's—and industry's—largest seizures.
Roman Sterlingov, a Russian-Swedish national who was arrested in April of this year, was accused of running one of the longest-running Bitcoin money-laundering services on the darknet.
In 2011, Sterlingov launched Bitcoin Fog, a mixing service. During its operation, Bitcoin Fog transferred over 1.2 million Bitcoins worth approximately $335 million.
According to the IRS, the majority of these cryptocurrency transactions came from darknet marketplaces linked to narcotics, computer fraud and abuse, and identity theft.
Roger Nils-Jones Karlsson was sentenced to 15 years in prison in July 2021 for money laundering, securities fraud, and wire fraud.
Karlsson made six figures through an investment fraud scheme between 2011 and June 2019, when he was arrested in Thailand. According to the IRS, Karlsson convinced victims to buy shares in the scheme called East Metal Securities with crypto assets, such as Bitcoin and other online payment systems."
The IRS has been fighting a number of cryptocurrency-related crimes, but it won't stop there. According to the report, the IRS has been hard at work.
IRS Criminal Investigation Chief Jim Lee told reporters on a conference call, "I expect a trend of crypto seizures to continue as we move forward into fiscal year '22."
Many crypto enthusiasts are concerned about the $1.2 trillion infrastructure bill passed by Congress recently. Node operators and miners would be required to report transactions to the IRS under the bill's current language, a daunting task.