In an nigh hr long interview, Kathryn Haun, Assistant Attorney for the U.S. Department of Justice inward San Francisco too lecturer on digital currencies at Stanford Law School, who prosecuted her ain colleagues, Shaun Bridges, a old Secret Services agent and Carl Mark Force, a DEA agent, for populace corruption inward an investigation arising from Silk Road, the infamous drug bazaar nigh downward inward 2013, stated that the argue U.S.A. regime did non nigh downward bitcoin is because they “recognize you lot can’t nigh downward bitcoin.” “There is only no way” – Haun said, “with these technologies 1 time the genie is out of the bottle you lot can’t seat it dorsum in…but fifty-fifty if nosotros could concur the developers of these technologies accountable,” the federal prosecutor continued, that would travel “counter to the legal system.”
The federal prosecutor wondered whether the police should travel changed, emphasizing she was non proverb so or otherwise, earlier contestation that developers province it is for privacy, “which I like”, but it is “obviously the instance a large per centum of criminals volition use” the technology. “At what betoken you, equally a developer, are comfortable amongst the applied scientific discipline existence used for to a greater extent than terms than good?” the prosecutor rhetorically asked.
“Ironic” Bitcoin Exchanges Ask Us to Investigate Thefts
It is “ironic” developers or exchanges enquire federal agencies to investigate digital currency-related crimes, such equally bitcoin thefts, Assistant Attorney for the U.S. Department of Justice inward San Francisco stated.
Haun compared the province of affairs to a banking firm robber who, afterward prison, is assaulted. “It’s non similar I would non accept the instance because nosotros had previously been inward an adversarial relation,” Haun said.
There take away hold been no known successful prosecutions of whatsoever digital currency-related hack inward the straightaway nigh vii years’ history of bitcoin. There take away hold been many such thefts, amongst Bitfinex existence the latest example, but nosotros are non aware of whatsoever state-level investigation into Bitfinex or whatsoever other hack amongst United States’ Office of Accountability criticizing federal agencies in 2014 for failing to protect consumers. Mixers too Tumblers Don’t Work
In farther portions of the interview, Haun stated that mixers too tumblers, which aim to obfuscate transactions, “were non that great, did non fall or mix also equally advertised” and, “some of the time” allowed investigators to “unscramble” transactions. The federal prosecutor stated that criminal uses of bitcoin take away hold a lot inward mutual amongst other crimes as, inward effect, agents follow the money. Using her ain colleagues equally an example, Haun explained that “a high-level review, showed [Shaun Bridges] was liquidating hundreds of thousands of dollars’ worth of bitcoin a month.” For obvious reasons this was suspicious, opening farther investigations too the discovery of bear witness indicating he had contacted exchanges, telling them that certainly transactions were proceeds of crime, seizing their funds too so sending them to his ain personal account.
It is non clear whether 1 such central was MT Gox. The Federal prosecutor stated they discovered at that topographic point were 2 rogue agents because 1 of them, presumably Carl Mark Force, had sent 21,000 bitcoins, worth $15 million, which had been stolen from a Silk Road vendor, straight to MT Gox. He withdrew them, the prosecutor says, 2 days earlier DAE seized MT Gox’s banking firm accounts and, afterward a pause, earlier “the hacks”, Haun stated.
They recognized at that topographic point were 2 agents because Shaun Bridges had a unlike “signature”, the prosecutor says. He tended to obfuscate his sick gains first, so cash them out, to cover evidence, rather than mail them straight to MT Gox equally Force did.
They both pleaded guilty, but their role, if any, inward the downfall of MT Gox, has non been revealed, something of detail importance straightaway that Mark Karpeles has been released without charges indicating, at to the lowest degree on a prima facie case, that he is non guilty of whatsoever prosecutable crimes during his operations of MT Gox.
Zcash May End The Money Trail
The prosecutor expressed skepticism regarding Zec’s claims of total anonymity, emphasizing that if it works equally advertised so it would brand the prosecutor’s undertaking “a lot to a greater extent than difficult.”
Criminals desire to travel paid, Haun stated, so agents follow the money, but:
“If nosotros all the abrupt omit an entire rootage of bear witness historically available, that volition brand our undertaking a lot to a greater extent than difficult, definitely.”
Although the prosecutor wonders whether Zcash would operate equally advertised, she states that it is non a enquiry of if nosotros volition take away hold anonymous money, but when, equally applied scientific discipline is advancing.
While Haun stated that she endorses privacy too individual transactions, mutual substance features of anonymizing software or cryptocurrencies, she added:
It’s evidently the instance that a large reveal of criminals volition travel using too gravitating towards that shape of applied scientific discipline [anonymous currencies,]. At what betoken practise you, equally a developer…are comfortable amongst your applied scientific discipline is existence used for to a greater extent than terms than good?
Legitimate Uses
Haun emphasized that bitcoin has legitimate uses, stating that a reveal of federal agents had bitcoin, “not to steal,” but because they works life the applied scientific discipline interesting. She so discussed potential uses of blockchain applied scientific discipline for tape keeping, particularly equally it relates to official documents, such equally nascency certificates, which are frequently forged for identity theft.
Blockchain, non having a fundamental administrator nor newspaper records, tin “significantly reduce” tampering too fraud of official documents, Haun stated, emphasizing that this was a serious occupation equally inward all cases she has prosecuted at that topographic point has been at to the lowest degree 1 forged document. The lecturer inward digital currencies, however, was unable to provide other unrelated examples of blockchain’s utilization when asked, falling dorsum to a similar category instead, medical records.
Nonetheless, regardless of the prosecutors’ statements too their potential interpretations or, even, her ain personal views, the interview is a welcomed measurement towards greater transparency too community appointment from those taxed amongst assisting the public.
As blockchain applied scientific discipline goes mainstream, skills are necessarily really much inward curt supply. Federal agencies, therefore, demand to practise a far ameliorate reputation equally far equally this infinite is concerned if they are to attract to a greater extent than talent. Treating hacks too thefts of millions seriously rather than dismissing them equally “ironic” would travel an obvious measurement towards such ends.
Images from Shutterstock too YouTube/TED.