US Customs Official Claims Crypto Conversions Can Be Traced

A "Vulnerability" is created every time criminals convert from cryptocurrency to government-issued ones, an official with U.S. Immigration and Customs Enforcement said Tuesday.

Matthew Allen, an assistant director of domestic operations with the Homeland Security Investigations division of ICE, discussed the role of cryptocurrencies in drug trafficking during an October 3 hearing before the U.S. Senate Caucus on International Narcotics Control.

"On dark net marketplaces and other 'unindexed' websites, purchases are often paid for with cryptocurrencies such as bitcoin and monero, among many others," he said in a prepared statement.

Perhaps most notably, he noted that HSI is having some level of success in tracking criminals who use cryptocurrencies to launder proceeds from drug sales.

While cryptocurrencies make transferring value relatively easy, he contended, criminals still need to convert cryptocurrencies into fiat - and vice versa - during the process.

"Utilizing traditional investigative methods such as surveillance, undercover operations, and confidential informants, coupled with financial and block-chain analysis, ICE-HSI is able to disrupt the criminals and dismantle the , as well as the cryptocurrency exchangers who typically launder proceeds for criminal networks engaged in or supporting dark net marketplaces."

Allen went on to discuss multiple types of cryptocurrency exchanges and how they may be used to facilitate money laundering.

Despite that national and international agencies are training investigators in how to best track cryptocurrencies, he said.

"We train investigators ... in an effort to deter organizations from laundering proceeds or using cryptocurrencies to fund the purchase of fentanyl/opioids or other narcotics," he said.

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