The dark side of Cryptocurrency payments unearthed with Narcotic Gang’s Arrest
Europol, Spanish, Austrian authorities have unearthed an international network of narcotics gang which used Bitcoin for payment.
It has taken the investigating officers more than three years to trace the network, and it’s antecedents since they used Bitcoin as the payment system. This was a major breakthrough for narcotics investigating officials as the cryptocurrency use has been a challenge for such Deep Web activities.
NPS and BTC payments
The adroit thinking and devious ways of the NPS or New Psychoactive Substance producers and distributors could be intruded after three long years. So advanced was the complex method the international gang engaged in for illegal production and distribution that it took narcotics investigators from three countries.
The operation to crack the gang was called DRYER and began in 2015 by collaborative investigations by Spanish Civil Guard, the Austrian forces, and Europol. The network, the investigators discovered was highly organized and established itself in over 100 countries. They found that NPS was delivered to buyers in postal envelops, parcels and were dispatched from an address that only had the Post Office Box Number.
NPS products were cleverly camouflaged as branded goods which are legally marketed. Often the hostage products would be cement additives as well as anti-humidity products. Many of the associated companies were offshore and would exist purely for establishing the legality of the business.
In order to avoid detection, they were accepting payment in cryptocurrencies and encouraged by merchants. They were well versed in the use of other payment systems and would be subverted through different bank accounts.
They allowed payment through PayPal, PayVision, Payward for deposition in bank accounts and were linked to companies in the organization. They also used crypto transfers and were handled mainly by Bitcoin.
The system then used the conversion method of ‘hawala’ to convert profits into cash. The traditional method of ‘hawala’ by conducting through intermediaries, other criminal organizations; these transactions were moving towards transactions in excess of 700,000 Euros and were then deposited n special companies. Other cryptocurrencies which were also seized from the gang by the authorities was, “Authorities seized 509 BTC, (about €2,500,000), plus €137,000 in IOTA and €30,000 in LUMEN.”
The sequence of events is quite bone-chilling considering the great extent by which cryptocurrencies can be exploited for illegal activities, impacting society negatively. This is often the reason for criticism, drawing attention to the limitations of decentralized structure of cryptocurrencies and their use in real-world business.
The easy use of cryptocurrencies by such underworld gangs is a clear indication that this method can be easily exploited. Hence detection methods of such conduit methods, as well as speculations, money laundering, and other illegal activities, have to be developed. Already existing methods have to be further tweaked to create better safeguards. Additionally, the crypto user community will have to be vigilant about the misuse of digital currencies by illegal users. Their cooperation with legal authorities will help in better, safer and more accomplished cryptocurrency world.
Thus, incidents such as crypto-robberies, crypto-jacking, and similar illegal activities draw attention again to the misuse of anonymity that digital currencies offer such miscreants.