The Internal Revenue Service (IRS) of the United States released its annual Criminal Investigation (CI) report on Thursday. The bureau claimed seizing $3.5 billion in cryptocurrency during the fiscal year 2021.
According to the most recent criminal investigation report, this sum accounted for 93% of all assets confiscated by the IRS that year. The IRS predicts that the number of bitcoin seizures will rise to billions next year. In its CI report, the study also highlighted other key data for 2021. Over $2 billion in tax fraud was discovered, with another $8 billion going to additional financial crimes. The agency executed 1497 warrants in total, with an 89.4% conviction rate.
Tax fraud consumed the most direct investigation time, accounting for 72 percent of all time spent. It included a wide range of offences, including cybercrime, identity theft, and corporate fraud.
The Internal Revenue Service (IRS) seized $3.5 billion in cryptocurrency
During the fiscal year 2021, the IRS Criminal Investigation section seized billions of dollars in Bitcoin and other cryptocurrencies. These seizures were linked to a number of different criminal investigations. The seizure of almost $1 billion in Bitcoin, however, was the most high-profile crypto case. This confiscation was tied to Silk Road, an online illicit market that was taken down by government authorities in 2013 and was the first contemporary darknet market.
Silk Road founder Ross Ulbricht was convicted on seven criminal charges by a federal jury in New York in 2015. In November 2020, special agents from the IRS Cyber Crime Unit (CCU) seized Bitcoin worth over $1 billion after a lengthy investigation. This was the biggest cryptocurrency seizure in US history.
Roman Sterlingov, 32, was detained by the Criminal Investigations Unit in April 2021. Since 2011, he has reportedly been running the darknet’s longest-running bitcoin money-laundering operation, Bitcoin Fog.
Bitcoin Fog transported Bitcoin worth roughly $335 million at the time of the transactions throughout its business. Sterlingov was charged with money laundering, running an unregistered money transmitting company, and money transmission without a license in the District of Columbia by the US Justice Department.
A former Microsoft software engineer was also accused of stealing $10 million from the corporation. The funds were then hidden through a Bitcoin Mixing Service. In November 2020, he was sentenced to nine years in prison for 18 federal offences relating to his plan by the United States District Court in Seattle.
IRS Criminal Investigation Chief Jim Lee told Bloomberg that he expects the trend of crypto seizures to continue in the fiscal year 2022. “As time goes on, we’re seeing crypto engaged in a lot of our crimes.”
Fighting against cybercrime
According to the research, cybercrime in the United States is rapidly increasing. As a result, the Criminal Investigation Unit has been developing a cybercrime campaign to combat it since 2015.
It further said that training on complicated cyber-financial criminal schemes including cryptocurrencies and blockchain has been emphasized. In 2022, the Criminal Investigation Unit will open an Advanced Collaboration & Data Center (ACDC) in Northern Virginia as part of this initiative.
In the infrastructure package that President Joe Biden signed into law earlier this week, Congress gave the IRS new authority over bitcoin transactions. The proposal would force cryptocurrency exchanges to monitor and report transactions to the Internal Revenue Service. As a result, they will have better insight into virtual currency transactions.
The IRS might gain from the Democrats’ planned $80 billion in financing, which is part of Vice President Joe Biden’s Build Back Better proposal. Jim Lee said that he could employ 250 to 300 additional special agents with the funds. Investing in systems to detect and monitor cybercrime is also a good idea.
