Secret Service owns crypto, loves blockchain and has an NFT collection: Reddit AMA

May 16, 2023 Coin Telegraph

Blockchain

In a crypto-themed AMA session on Reddit on May 15, the U.S. Secret Service answered a wide range of questions and revealed their little-known NFT collection.

The United States Secret Service owns crypto, has its own NFT collection and has praised blockchain technology’s ability to fight financial crime, Reddit users learned during a recent ask-me-anything (AMA).

On May 15, representatives from the United States Secret Service San Francisco Field Office and the Bay Area Regional Enforcement Allied Computer Team (REACT) opened themselves to questioning from members of the subreddit, r/cryptocurrency.

While some regulators still see crypto as a tool for fraudsters and scammers, the REACT task force applauded the public and transparent nature of blockchains as an “amazing opportunity” for crime fighters to track the flow of money.

*The "ask me anything" Reddit thread from the Secret Service. Source: Reddit.*

The Secret Service has previously made the point that the immutable nature of the blockchain ledger means that illicit financial activity can be more easily monitored and tracked than fiat in some cases.

An upcoming Netflix-featured Bitfinex story involving some unlikely criminals made this point very clear: it’s quite hard to launder money using blockchain.

Answering a follow-up question about how best to hide shady behavior on the blockchain, the Secret Service said that if people want to do dodgy things financially, it’s best to take the money in cash than crypto.

*Secret Service provides evidence to Reddit to verify their identity ahead of the AMA. Source: Reddit*

Another Redditor asked whether or not the Secret Service itself held cryptocurrency, to which the authority said they were “definitely holders of crypto” and described themselves as crypto “enthusiasts” in later responses. The agency said that by owning crypto, it helps them better understand the deeper mechanisms of the crypto world.

“Pretty much most cases require a certain level of ELI5’ing. It’s somewhat of a running joke around here,” the agency explained, with the acronym “ELI5” referencing the popular subreddit r/explainlikeimfive.

When asked if they see any significant differences between crypto crimes and illicit activity in the world of traditional finance, the Secret Service noted that the “vast majority” of calls and reports received by their office usually involves crypto in some fashion.

"They vary in a lot of ways to fiat investigations, both in good ways and bad ways, but most notable is that crypto transactions are irreversible and immutable."

While the agencies responded to a wide range of serious questions, there was also some fun to be had during the session. When one redditor asked whether the Secret Service would consider launching its own “memecoin”, the agency responded by plugging its own NFT collection on OpenSea.

*The U.S. Secret Service San Francisco Field Office NFT Collection. Source:* *OpenSea*

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AUSTRAC releases 2 new guides to help spot illicit crypto use

April 21, 2022 Coin Telegraph

AUSTRAC

AUSTRAC also urged financial institutions from debanking clients who may be engaged in suspicious account activity, as a mistake could be costly to “Australia’s economy.”

Australian financial compliance enforcement agency AUSTRAC has released two new guides to help entities to spot when customers are using crypto for illicit means, or when they are being forced to pay the creators of ransomware.

But it warned that debanking customers merely on suspicion of such activity was a harmful practice with serious negative effects.

In an announcement posted earlier today, AUSTRAC noted that the growing acceptance, value and adoption of crypto and blockchain tech has been accompanied by an increase in cybercrime.

“Cyber-enabled crime is an increasing threat to Australians. According to the Australian Cyber Security Centre (ACSC), 500 ransomware attacks were reported in the 2020-21 financial year, an increase of nearly 15 percent from the previous year,” AUSTRAC stated.

The ransomware and “criminal abuse of digital currencies” guides are not only designed to help spot bad actors, but also to make it easier to report suspicious activity to AUSTRAC — something which businesses must do after reporting the matter to the police.

Blockchain Australia CEO Steve Vallas welcomed the new guides, stating that the “use of digital currencies for criminal purposes has no place in our sector.”

“Open dialogue, pro-active guidance and strong relationships between Government and industry are necessary to ensure businesses can identify and report behavior that puts Australians at risk of harm.”

In the ransomware guide, AUSTRAC highlighted multiple indicators that a customer may be quickly trying to pay a ransom. The list included behaviors such as impatience over the speed of transactions, sudden large transactions from newly onboarded businesses and transfers of one's entire holdings with a lack of account activity afterward.

While the indicators might seem obvious, AUSTRAC pointed out that most “victims are often reluctant to report” as they are looking to get their businesses out of the clutches of attackers and up and running again as soon as possible.

“Where possible, encourage your customers to report ransomware incidents to the ACSC’s ReportCyber service and law enforcement,” the guide reads.

In the illicit crypto use-focused guide, AUSTRAC listed activities such as tax evasion, money laundering, scams and the purchase of illegal products on the darknet. The regulator paid the most attention to money laundering, as it gave a rundown of its key components which include “placement, layering and integration.”

After purchasing digital assets with fiat (placement), the criminal will then attempt to convert the assets across different accounts and platforms (layering) to “distance the funds from the source.”

Decentralized finance (DeFi) platforms, mixers and privacy coins were stated as methods to do so. Finally, the bad actor will use the final variant of the funds to reintroduce the capital into traditional financial services or products (integration).

“The conversion to and from government-issued currency is the point where a criminal is most exposed and identifiable,” the guide reads.

Notably, the guide also urged traditional financial institutions to steer away from debanking customers, as this has been a key issue in the local crypto sector and could have major consequences if a lawful person has incorrectly been identified as a criminal.

“Debanking legitimate and lawful businesses can negatively impact individuals and businesses. It can also increase the risks of money laundering and terrorism financing and negatively impacts Australia’s economy,” the guide warns.

Cyber crime