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Britain Confiscates Thousands in Bitcoin From Hacker

May 7, 2018 Blog

Bitcoin has become a much more mainstream investment, but one big concern on the part of authorities is that Bitcoins will be used to launder money or to hide the proceeds of criminal activities. Regulators are aiming to impose rules that would limit the ability of Bitcoin to be traded anonymously in order to help address this problem. As regulations develop, it is important for investors to reach out to a Bitcoin lawyer for help to ensure they are in full compliance with current laws.

Lawmakers are not the only ones working to evolve the framework surrounding how Bitcoin is treated. Courts and police are also charting a new course, as in a recent case in which $700,000 worth of Bitcoin was seized from a 26-year-old cyber criminal. According to CCN, the case was one of the first in which Bitcoin was seized as part of a criminal proceeding.

Bitcoin Seized From Hacker

CNN indicates that the $700,000 in Bitcoin was seized by Scotland yard because the coins were seen as proceeds from criminal activities committed by a 26-year-old cyber fraudster.  The fraudster was logged into his Bitcoin account at the time of his arrest, so authorities were able to seize the coins.

The hacker’s crimes included accessing websites of major companies including Uber and the UK store chain Sainsbury’s in order to gain access to the personal information of customers. This personal information was then sold to others after phishing emails and other hacking techniques revealed the info. The personal information was sold on the dark web and the cyber fraudster was paid in Bitcoin.

British authorities worked on investigating the case for two years, and one of the police officers on the investigation team indicated that British authorities were now becoming better equipped to find criminals who attempted to protect their anonymity by converting the proceeds of their crimes to bitcoin.  Investigators were able to use the cyber-fraudsters computer to obtain access codes and encryption codes that are necessary to access Bitcoin and other virtual currencies.

According to CCN’s report, the confiscation of the Bitcoin in this particular case raised questions about how frequently Bitcoin is actually used to hide the proceeds of online cyber crime and highlighted the difficulties that authorities often have in tracking fraudulently obtained funds that have been converted into cryptocurrencies. However, there is some evidence to suggest that Bitcoin’s perceived association with online crime may actually be overblown, as many investors in Bitcoin are operating legitimately to trade the virtual currency.

Regardless of how often Bitcoin is actually used in criminal conduct, it is likely more cases like this will occur as Bitcoin becomes more heavily regulated and as laws surrounding the cryptocurrency develop. Investors need to ensure they are in full compliance with regulations related to virtual currencies and should consult with a Bitcoin lawyer for help understanding their obligations.