The Law Cracking Down on Bitcoin Black Market
Bitcoin Black Market
Criminals continue to explore and exploit new technologies for personal gain. It’s no surprise that they would do so using a new technology like bitcoin. Online black markets allow criminals to quietly perform transactions for illegal goods such as weapons, drugs and other various forms of contraband.
Daniel Brian Springer III; not to be confused with professional wrestler Daniel Bryan, had purchased ecstasy from China illegally, using an online black market. The Tampa, Florida native paid for the drugs in bitcoin, enabling him to avoid law enforcement.
Tampa FBI spokesman Dave Couvertier says:
“Criminals are nearly always early adopters of new technologies and financial systems, and virtual currency is no exception.”
Springer’s package from China was intercepted by the Drug Enforcement Administration back in July 2013. He told officials that he ordered the drugs over a website called Black Market Reloaded. Springer used $2,000 worth of bitcoin to complete the transaction. According to court documents, he anticipated reselling the drugs for profit.
Springer, along with his father Daniel Brian Springer II both plead guilty to federal drug conspiracy charges. Springer Sr. assisted his son in arranging where the drugs would be delivered to.
Their plea is thought to be the first Tampa-based prosecution that used bitcoin in a crime. Due to the convenience bitcoin allows criminals to conduct illegal activities, bitcoins’ reputation has been tarnished by the bitcoin black market.
Although bitcoin transactions are thought of to be private and anonymous, researcher Jerry Brito of George Mason University says a better description of the digital currency would be pseudonymous. He says this is because users are given identities, aka pseudonyms, which are similar to account numbers as they are a randomly produced set of letters and numbers. Brito says:
“In reality, it is very difficult to stay anonymous in the Bitcoin network.”
Due to the Blockchain, all bitcoin transactions are visible on the Internet to the public. Brito told the Tampa Tribune that law enforcement can use Blockchain to their advantage to trace bitcoin transactions if necessary.
Blockchain requires no search warrants for the law to investigate, unlike the need for warrants when dealing with credit cards. Brito adds that investigators can use the public ledger to determine a bitcoiners’ identity.
Law enforcement will have to observe more on how to deal with the potentially illegal uses of bitcoin. Brito ends by saying:
“Its something new that they (the law) have to learn. I don’t think it’s something that is going to leave them powerless to do their jobs, but they’re going to have to learn it.”
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