35 darknet drug traffickers arrested in the US; $20 million in Bitcoin seized

By Christine Duhaime | June 26th, 2018

Over 35 people were arrested in a US-wide sweep by the US DOJ, DEA, US Secret Service, ICE, HSI and the FBI agents for selling illegal drugs over the darknet and laundering the proceeds of crime using, inter alia, Bitcoin.

The operation involved agents posing as digital currency exchanges to obtain personal information of drug traffickers online.

According to the DOJ, during the year long operation, law enforcement agents disguised themselves as money launderers on darknet marketplaces, including Silk Road 2, the Canadian-based AlphaBay, Hansa and Dream offering to act as a digital currency exchange by exchanging Bitcoin for US dollars in order to learn the identity and addresses of the drug traffickers on the darknet sites.

As part of the arrests, police seized guns, large quantities of illegal drugs including fentanyl, grenades, Bitcoin mining machines, pill presses, computers and gold. They also seized US$3.6 million and US$20 million worth of Bitcoin.

The US Secret Service called money laundering with digital currencies one of the largest threats to the US financial system.

The  operation, which culminated in four weeks of more than 100 enforcement actions around the US, resulted in the following:

  • Arrests of more than 35 darknet vendors who engaged in tens of thousands of sales of illicit goods;
  • Execution of 70 search warrants, resulting in the seizure of massive amounts of illegal narcotics, including 333 bottles of liquid synthetic opioids, over 100,000 tramadol pills, 100 grams of fentanyl, more than 24 kilograms of Xanax, and additional seizures of Oxycodone, MDMA, cocaine, LSD, marijuana, and a psychedelic mushroom grow found in a residence;
  • Seizure of more than 100 firearms, including handguns, assault rifles, and a grenade launcher;
  • Seizure of five vehicles that were purchased with illicit proceeds and/or used to facilitate criminal activity;
  • Seizure of more than $3.6 million in U.S. currency and gold bars;
  • Seizure of nearly 2,000 Bitcoins and other cryptocurrencies, with an approximate value of more than $20 million.

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