The US Government Accountability Office (GAO) has released a report detailing the role Bitcoin ATMs can play in human and drug trafficking.
New report from the US Government Accountability Office
The US Government Accountability Office has published a new report. It describes how cryptocurrencies and crypto ATMs can be used to facilitate human and drug trafficking.
The report sets out two main reasons why these ATMs may help facilitate criminal activity.
“While ATM providers are required to register with FinCEN, they are not required to routinely report the specific locations of their ATMs,” the report reads.
“This limits the ability of federal agencies to identify vending machines in areas identified as high risk for financial crime and where human and drug trafficking may be involved.”
Second, the report adds that crypto vending machines can choose not to collect information about a user’s identity. This, in turn, ensures some degree of anonymity. This makes cryptocurrencies attractive to criminals, the researchers said.
The report also cites the FBI as saying there has been an increase in the use of crypto machines for illegal purposes, including trafficking in people and drugs.
According to Coin ATM Radar, a website that allows ATM operators to self-report ATM locations, crypto ATMs are rapidly spreading across the United States. In January 2017, a total of 560 were active in the US Today, that number has grown to more than 30,000.
The report singles out Bitcoin as the biggest culprit.
“Bitcoin is the most widely used virtual currency that agencies have observed facilitating illegal activities. This is what officials from several federal agencies we interviewed say,” the report reads.
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The concerns about cryptocurrencies
In June 2021, the GAO reported on payment methods accepted by platforms involved in the US online commercial sex market, which the GAO believes can be used for illegal sex trafficking.
“The Internet has enabled an online market for commercial sex, which can be used to promote self or other prostitution and sex trafficking,” the GAO said.
The GOA analyzed 27 platforms engaged in the online commercial sex market. “Such platforms can be used to facilitate sex trafficking,” the GOA added.
Their analysis found that 15 of the platforms accepted virtual currencies as a form of payment, alongside other forms of traditional payment. Three of these accepted only virtual currency.
The GOA also interviewed officials from the Homeland Security Investigations Unit (ICE-HSI) of the Immigration and Customs Enforcement. These said that certain “anonymous features” of cryptocurrencies attract sex traders.
Drug trafficking and crypto
The researchers also found that cryptocurrencies can be used to facilitate drug trafficking, a link that has been made many times before.
According to the Cyber
The report cited the National Drug Enforcement Administration’s National Drug Threat Assessment. It showed in 2020 that cryptocurrencies were increasingly used as a means of transferring revenues across borders.
It is well known that drug markets on the dark web have been using cryptocurrencies for years. Notable cases include Silk Road (2014), Alphabay (2017), Wall Street Market (2019) and Buyersclub (2020).
According to Chainalysis data published in 2020, dark web markets made more money in 2020 than in any other year.
More recently, Chainalysis found that crypto-related crime hit an all-time high of $14 billion in 2021. This figure represented just 0.15% of the total $15.8 trillion in crypto volumes. However, this marks the industry’s lowest rate of illegal transactions ever.