New Vice Report Says Bitcoin is Catching Criminals Acting as a Money-Laundering Device
Bitcoin has long been known to protect the identity of people using it thanks to its anonymous transactions. However, in the case of 12 indicted Russians accused of interfering in 2016 U.S. presidential elections, investigators can make use of Bitcoin as a tracking device and navigate the blockchain through a trail of transactions in a bid to prove guilt.
Bitcoin Transactions Can Be traced
A new report from Vice shattered the myth that Bitcoin transactions are 100% anonymous, with Tim Cotten, a blockchain developer, showing just how forensic analysts can utilize information on the public blockchain to trace Bitcoin purchases.
“It is not a good idea to commit crime with Bitcoin because the moment you have one single weak link in your operational security, all of your history is now exposed. As we’ve seen in case after case, indictment after indictment, where they’re shutting down drug trading, exchanges that are operating illegally, it’s not just traceable – it’s trivial to trace these things,” Cotton said.
In video, Cotten shows the process through which a subpoena would let law enforcement to determine exactly the person that processed a specific Bitcoin transaction and the exact day it was made, ultimately identifying them by their legal residence, date of birth, and name.
According to the blockchain developer, “Someone with enough time and dedication will be able to trace your path back.”
Bitcoin sellers such as Coinbase typically require one to submit their personal information, and with the power of an order, government authorities could get any information they want, linking Bitcoin transactions to real persons rather than random series of letters and numbers.