FBI cryptocurrency report Bitcoin

The U.S. Federal Bureau of Investigation is concerned about the potential for money laundering and other criminal activities in the anonymous Bitcoin payment system. These are the conclusions that can be drawn by looking at a document called “ Bitcoin Virtual Currency: Unique Features Present Distinct Challenges for Deterring Illicit Activity ” that appeared on the network this week .

The report published on April 24th is not classified, but is marked as a document for official use only, and on May 9th it leaked to the Internet. The document not only shows the system ratings, but also unintentionally describes tips for cryptocurrency users, following which they can remain more anonymous.



In the document, the FBI notes that since for the sake of excluding the central governing bodies, Bitcoin operates with cryptography and peer-to-peer network architecture, which is completely different from the principles of functioning of E-Gold and WebMoney, it will be much more difficult for legal organizations to identify suspicious users.

Bitcoin is an anonymous cryptocurrency that allows buyers and sellers to perform anonymous transactions. Bitcoin coins are accepted in many stores selling quite ordinary goods, for example, clothes or music, but they are also used as payment in underground organizations selling illicit drugs.

In order to receive money on hand, the recipient will be forced to exchange bit coins for, for example, US dollars or British pounds through a third-party service. The FBI is confident that the authorities are still able to detain suspects who use third-party Bitcoin-related services that require entering personal data or banking information to exchange Bitcoin coins in traditional currencies. However, the report notes that the use of offshore services that do not require reliable personal data can upset such plans.

The FBI report describes the routine operations of the system: coin generation, transfer and receipt. Curious is the estimate of Bitcoin’s total money supply: according to the exchange rate of the previous month, 8.8 million bit-coins cost about 4 or 5 apiece each, and the FBI estimates the value of the Bitcoin economy in the amount of 35 to 44 million US dollars.

“If Bitcoin strengthens and increases its own popularity, then it will increasingly become a useful tool for various illegal activities in the computer field. For example, activities such as child pornography and online gambling, which require a simple payment system, are already taking place on the Internet. Bitcoin can attract money launderers, traffickers, terrorists and other criminals who shun traditional financial systems by making money transfers via the Internet. ”

Data on all Bitcoin transactions is publicly available, but the only information that identifies the user of the system is his address, which makes transactions anonymous. Or almost anonymous. As the FBI notes, anonymity depends on the user's actions.

Since the user's Internet address is published on the network at the moments when he makes transactions, non-proxy access increases the risk of law enforcement agencies discovering methods for matching the user and his network address. Last year's report by Irish researchers indicated that the analysis of publicly available information on the Bitcoin network (transaction records, users publishing their keys), subject to the availability of information resources available to government bodies (bank data, delivery addresses), makes it possible to identify many users.

The FBI carefully lists a few tips (albeit not entirely original) that can help protect anonymity:

Use a new address each time you receive funds.
Redirect all Bitcoin traffic through the anonymizer.
Collect all coins from your addresses into one for a new payment.
Use specialized money laundering services.
Use third-party e-wallet services to combine addresses.
It is possible to create new versions of the client that can help increase anonymity due to new functions, for example, choosing which Bitcoin address to pay from, etc., which will help those who do not understand the technology improve the anonymity of their transactions.

But far more dangerous is not the identification of users, but hackers who can clean someone else’s wallet. Cases of using malicious programs to steal wallet files have already been registered, such as June, as the victim claims, the theft of 25 thousand bitcoins. Last year, the Infostealer.Coinbit program was discovered, which was specially created to steal Bitcoin currency from virtual wallets.

Hacking of servers of the hosting provider "Linoud" is indicated. The report recorded attempts to create botnets for generating coins using infected machines. The report quoted an anonymous source labeled “reliable” that reported compromising a computing cluster at an unspecified university in the midwestern United States; more detailed information about the incident is not given.