Crypto Auctions and Arrested Bitcoins
By now, many cryptocurrencies have been associated with black markets and illicit activities.
Without the involvement of financial institutions, bitcoin’s feature of allowing direct payments to be made from one party to another and has been also utilized as a way to avoid institutional controls and settle illegal transactions.
Approximately one-quarter of Bitcoin users and one-half of Bitcoin transactions are associated with illegal activity according to a recent study of University of Technology Sydney (UTS).
The magnitude of this phenomenon is considerably reduced given that there are almost 28.5 mln Bitcoin wallets that hold more than 0.001 BTC and many users own several wallets.
While it seems quite simple to seize a fiat account or appropriate cash, the nature of cryptocurrencies makes this process much more complicated.
International authorities did not try to underestimate the issue. Europol recently recognized that three to four bln pounds of criminal money in Europe is being laundered through cryptocurrencies.
Europol’s Executive Director Rob Wainwright underlined that:
Proceeds from criminal activity are being converted into Bitcoins, split into smaller amounts and given to people who are seemingly not associated with the criminals but who are acting as money mules. These money mules then convert the Bitcoins back into hard cash before returning it to the criminals.