TL; DR Breakdown
- IRS report says 93% of investigations involve digital assets.
- Crypto crimes have increased drastically in the last year.
- IRS report breakdown
The regulation of the crypto sector is a major aspect that governments worldwide have continued to hammer on for years. This is because even though the industry is profitable, some entities are still carrying out illicit activities. To back up this point, the recent report released by the Internal Revenue Service of the United States of America has opened a can of worms regarding crypto across America. The IRS report mentioned that most of the criminal investigation ongoing has one element in common: crypto.
To put this into perspective, the IRS claims that about 93% of the criminal investigations that the regulator is carrying out feature one crypto or another. The report put the total amount of digital assets seized during investigations by the regulators at $3.5 billion. The Criminal Investigations arm of the IRS has been working tirelessly behind the scene to tackle financial cruise issues. Part of its recent program to that effect is the Cyber Crime Unit. The unit was created off the back of the massive rise in cybercrimes.
The report points explicitly that the criminals in question are always looking for ways to carry out their illicit affairs, thereby turning to crypto. True to that statement, digital assets have been involved in one crime or the other in the last few months. Some typical examples include extremists using digital assets to find their operations and the issue of Russian intelligence using crypto to sway the results of the United States election in their favor. Asides from those, there was a report about a missing person in Sweden, and regulators are trying to solve the mystery by cracking some privacy coins.
IRS report breakdown
The IRS report had some notable events where the Criminal Intelligence seized digital assets believed to have been used in illicit activities. The first was the arrest of Roman Sterlingov, a Russian native who was said to have carried laundered money on the Darkweb using Bitcoin. Sterlingov’s operation, Bitcoin Fog, ran since 2011, facilitating cash over $335 million using Bitcoin.
The IRS report said that majority of the money recovered from Sterlingov were proceeds from several crimes, including drug peddling, hacking, and other illicit activities. Another arrest in the IRS report was Roger Nils-Jones Karlsson, who committed money laundering, wire fraud, and securities fraud. Like Sterlingov, Karlsson’s operation began in 2011 and ran through 2019 before being arrested by operatives in Thailand. Karlsson has been sentenced to 15 years imprisonment. As per a Bloomberg report, IRS has noted that it won’t rest on its oars concerning financial crimes involving crypto.
According to Jim Lee, the Chief of the CI department, the regulatory body will continue to seize assets even as they prepare to enter the 2022 fiscal year. Tongues are still wagging at the new infrastructure bill that was passed in the United States. The bill worth $1.2 trillion will mandate crypto miners and node operators to report their activities to the regulator.