From their early days[1], cryptocurrencies have been associated by many with black markets and illicit activities. Bitcoin’s feature of allowing direct payments to be made from one party to another without the involvement of financial institutions, has been also utilized as a way to avoid institutional controls and settle illegal transactions.
A recent study[2] of University of Technology Sydney (UTS) found that “approximately one-quarter of Bitcoin users and one-half of Bitcoin transactions are associated with illegal activity”
On the other hand, given that there are almost 28.5 mln Bitcoin wallets that hold more than 0.001 BTC and many users own several wallets - with some inactive - the magnitude of this phenomenon is considerably reduced[3].
Regardless, it is a fact that some illegal activities are done with cryptocurrencies. While it seems quite simple to seize a fiat account or appropriate cash, the nature of cryptocurrencies makes this process much more complicated. Let’s analyze some cases where the government authorities seized cryptocurrency assets due to illegal activities and find out where they end up.
International authorities did not try to underestimate the issue. Europol recently recognized[4] 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”.
Silk road
In this complicated scenario, international prosecutors reacted by performing some important police operations. One of the most widely known operations was carried out in Oct.
