What Americans make with big encrytion?

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The US government regularly holds auctions for auctions of Bitcoin, Ethereum, Litecoin, and other cryptocurrencies.

The auction started in 2013 with the restriction of the “Silk Road”. "Silk Road" is a black website involved in the trade in illegal products.

“It could be 10 ships, 12 cars, Bitcoin,” said Jarod Koopman, head of the IRS's cybercrime division.

For years, the US government has been auctioning off Bitcoin and other cryptocurrencies. Historically, “Uncle Sam” has done a dangerous job seizing business opportunities.

Remember in 2018 the US government sold Riot Blockchain 500 Bitcoins for around $ 5 million? This Bitcoin is now worth more than $ 23 million. And in 2014, billionaire venture capitalist Tim Draper got 30,000 bitcoins for $ 19 million? It would be over $ 1.3 billion today.

The US government has secured all of these bitcoins and some treasures that people can easily think of by snatching them up. All these assets are sold identically.

“10 ships, 12 vehicles, one of which will be X Bitcoin,” said Jarod Koopman, IRS Cybercrime division director.

Then the government will sell $ 56 million worth of previously seized cryptocurrencies to the competition. These cryptocurrencies were seized by Ponzi agents involved in the BitConnect offshore cryptocurrency lending. Unlike other cryptocurrencies, the contest proceeds are distributed to other government agencies, and the money from the sale of this cryptocurrency is used to pay the victims.

The government's foreclosure and sale activity was growing so rapidly that it sought help from private companies to manage the storage and sale of inventory.

Seizures and Bitcoin Recovery

The United States has used various counterterrorism tools to track and capture crypto tokens, some of which were created to break the law.

"When it comes to innovation and technology, the government is usually only a few steps ahead of the perpetrators," said former federal cybercrime lawyer Justice Welle.

"It will not be done in a simple training," he added. However, he estimates that in three to five years, "there will be an update and revision of the operations manual that tells police officers how to handle encrypted searches and seizures."

There are currently three major stages in the circulation of Bitcoin and other cryptocurrencies in the US legal system.

The first step is to diagnose and treat the seizures. The second step is to liquidate the confiscated cryptocurrency. The third step is to distribute the proceeds from the sale of cryptocurrencies.

In fact, according to Koopman, the first step is integration. He said his group often conducts joint research with other government agencies. It could be the FBI, the Department of Homeland Security, the Secret Service, the Office of Vaccines, or the Bureau of Tobacco, Alcohol, Guns, and Drugs.

“In a lot of cases, especially in social media, it's because no organization can do all of this… it's joint research,” Koopman said. He was involved in the Silk Road government and the 2017 exploration of Alpha Bay, which ultimately led to the closure of another famous and large darknet market.

Koopman said his IRS office manages open source access and information, which often includes tax exemptions, tax evasion and financial research. Its team consists of officers carrying weapons and badges and carrying out searches, arrests and restrictive orders.

Other high income schools focus on the use of technology.

"If there is a need for control, whether it is an arrest, capture or search, we all come together. It does not matter whether it is national or international", a- he declared.

Many agents intervene during a crisis to provide appropriate care. This includes executives who have the necessary hardware wallets in place to prevent cryptocurrency theft.

“We keep our private keys at our headquarters so they can't interfere,” Koopman said.

In recent years, the US government has maintained a cryptocurrency registry.

“In 2019 we will save around $ 700,000 in cryptocurrency. In 2020 that number will reach $ 137 million. So far, in 2021, it will be $ 1.2 billion,” Koopman said in August. The fiscal year ends on September 30.

Cybercrime and the emergence of digital tokens are expected to “write” government “crypto coffers”.

Cryptocurrencies are sold at wholesale auctions.

When the case is closed, the United States Police Department will be the primary agency responsible for auctioning the government's crypto assets. To date, the company has seized and sold over 185,000 bitcoins. Cryptocurrencies are currently valued at around $ 8.6 billion, but most of them have been sold for much lower prices today.

This is an important role for government agencies, and part of the reason the police do not do it alone.

The U.S. president, an organization that primarily auctions government assets, such as tractors, added cryptocurrencies seized from the fair earlier this year.

In July of this year, after more than a year of research, the Justice Department hired San Francisco-based Anchorage Digital to oversee the seizure or seizure of cryptocurrencies in the illegal case. Anchorage was the first government-recognized financial institution to help the government store and dispose of these digital assets. This agreement was previously granted to BitGo.

"The police are looking for experts to help them. It is a good sign that this situation will continue," said Sharon Cohen Levin. He was involved in the first trial and served as director of financial and insurance affairs in the New York Southern District attorney's office for 20 years.

According to Koopman, the process of auctioning loose cryptocurrencies at fair prices will not change.

"Basically you have to make an appointment for the competition. We don't want the treasure store to flood the market with many factors that could affect their value."

But, Koopman said, in addition to selling differently, his goal is not to try to “time” the retailer at the highest possible price. “We didn't try to control the business,” he said.

In November 2020, the government confiscated $ 1 billion in Silk Road related Bitcoin. With the data still pending, bitcoins are not yet used in crypto wallets. If the government sold its Bitcoin blanket last month when Bitcoin's value hit its high of $ 67,000, deposits in "cryptocurrency vaults" would be well above its current market value.

where does the money go

Once the issue is closed, the cryptocurrencies will be converted into fiat currencies and the government will redistribute them. The proceeds of the sale are usually deposited into one of two accounts: the financial institution or the forfeiture fund.

“The research agency is involved in deciding what funds will go,” Levin said.

Koopman reported that cryptocurrencies were tracked and seized by his team, accounting for around 60-70% of funds seized by the US Treasury, making it the largest donor.

Once the Bitcoin bank has put in one of these two currencies, cryptocurrency products can be integrated into a variety of functions. For example, Congress can withdraw that money and use it for other purposes.

A Kupman official said, "Intelligence organizations can apply for part of the funding for the Department of Strategy and Finance."

In a few years, the Koopman team will become different depending on the demand. But you haven't received anything for a few years because Congress chose to take all the money out of your account.

Tracking money isn't a fair process, says Alex Lakatos, partner at Washington law firm Mayer Brown. Lakatos advises consumers on penalties and insurance.

The Department of Justice currently operates the Forfeiture.gov website, which provides information on criminal activity. For example, this article describes a case where 1.04430259 Bitcoin was stolen from a personal wallet in Kansas in May. In April of this year, someone in Texas also seized 10 bitcoins. However, it is not clear whether this list includes all of the cases at the hearing.

“I don't think there is a place where the American police have all the cryptocurrencies, let alone a few states that can seize them. This is crap,” Lakatos said. Someone is supporting this and wants to do what they are doing. "

A Justice Department expert said he was "very confident" that CNBC did not have a database of stolen cryptocurrencies.

However, it is true that more and more cryptocurrency foreclosures are open to the public, for example, earlier this year the FBI hacked Bitcoin wallets held by Colonial Pipeline hackers.

“In my experience, people at the top of government can stay there for a while and want to accomplish something in the meantime,” Good said.