Six US law enforcement agencies, including the Secret Service, recently seized a bitcoin exchange, despite the fact it was registered in another country.Alexander Vinnik, alleged to be the operator of BTC-e, has been charged with 19 counts of illegal money transmission and money laundering. Vinnik and the bitcoin trading platform stand accused of laundering more than $4bn worth of illicit funds since 2011.
The value of bitcoin reached record highs recently, breaking through the $4,500 barrier.
The world’s most widely used cryptocurrency, which is transacted between parties without an intermediary such as a bank, is used widely in cybercrime.
In the wake of several high profile ransomware attacks, many businesses in the UK have preemptively purchased Bitcoin in case they need to pay a ransom to unlock time-sensitive files.
A leading cybersecurity executive believes improving regulation of the cryptocurrency won’t be easy, but directed wisely, could be very effective in undermining bitcoin’s value to criminals.
“Recent raids of by US law enforcement agencies against the companies involved in bitcoin mining and exchange business, probably exposed a lot of inconvenient truths about the dark side of unregulated cryptocurrencies,” said Ilia Kolochenko, CEO of cybersecurity firm High-Tech Bridge.
“We should expect more attempts to regulate bitcoin and other cryptocurrencies. However, few of them will likely be successful due to technical infeasibility.
“Nonetheless, the administrative burden and costs, and severe penal sanctions for non-compliance can play a major role and preclude cybercriminals from using bitcoin in total impunity. It’s similar to gold: if you cannot sell it for cash, or other tangible and untraceable goods, it becomes useless.”
