Miami Authorities Impounds Over 700 BTC In Fraud Case: One of  Largest Seizures in the US


In a rare case, the Fed in Miami, Florida have seized up to 700 BTC, equivalent to $34 million, from a resident of Parkland who was suspected of selling internet users’ private information for Bitcoin. The suspect allegedly hacked and sold people’s account information from HBO, Netflix, Uber, and other significant companies on the dark web.

The U.S. prosecutors said that they were able to confiscate a large sum of bitcoin after recently obtaining a default judgement in Miami federal court. Furthermore, they accused the suspect of using anonymous identities on the Dark Web to carry out over 100,000 fraudulent transactions from 2015 to 2017. 

Miami Herald reported that:

“Operation TORnado was investigated by agents of the FBI, Internal Revenue Service, and Homeland Security Investigations. The Miami federal prosecutors who filed the case are Monique Botero, Mitch Hyman, Nicole Grosnoff, and Nalina Sombuntham.”

The suspect, whose name is unknown, was not charged because the evidence was insufficient to make a criminal case. However, they targeted his cryptocurrency in the civil case. The suspect did not react to the U.S. government’s move to take his cryptocurrency, according to court reports.

According to court reports, authorities estimated the suspect’s cryptocurrency value was $47 million when the case was filed last October. Still, the value decreased to $34 million within six months because of its volatile nature.

TOR Browser and Dark Web

The dark web is a network of anonymous users and hidden service websites. The suspect used the TOR (The Onion Router) browser, a private browser, to access the dark web to sell information of internet users. Additionally, TOR hides its users’ identities on the internet, making it hard to know their IP addresses or trace their transactions.

The prosecutors also claimed that he used tumblers, a crypto mixing service that makes it difficult to identify illegal funds and their movements difficult. The tumblers allowed him to transfer the bitcoins and exchange them for other assets without leaving footprints. This technique is known as “chain hopping,” which authorities say violates federal money laundering laws.

Government Authorities and Crypto Regulation

One of the main characteristics of cryptocurrency is decentralisation, which means that a single person or authority cannot regulate it. This feature has made it hard for financial and crime regulators to pick out crypto-related crimes in the last few years. However, more authorities are adopting blockchain technology which is more transparent and has resulted in several bitcoin seizures in 2022 alone.

February witnessed the confiscation of $4.5 billion in cryptocurrency stolen during a crypto exchange hack in 2016. Other countries like China, Singapore and parts of Europe are also investing money to research the impact of crypto and how it can be regulated for national use.

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