IRS seized $ 3.5 billion worth of crypto this year, predicts even more in 2022

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The U.S. Internal Revenue Service (IRS) released its annual criminal investigation (CI) report on Thursday. In fiscal 2021, the agency announced that it had seized $ 3.5 billion in crypto. According to the latest criminal investigation report, that figure represented 93% of all assets seized by the tax authorities that year.

The IRS expects this cryptocurrency seizure trend to increase to even more than billions next year.

The report also highlighted other important figures for 2021 in its CI report. The total value of the identified tax evasion was over $ 2 billion, while around $ 8 billion went to other financial crimes. In total, the agency executed 1,497 warrants, with a conviction rate of 89.4%.

Related reading | Australian Police, FBI Investigation Leads To Confiscation Of Over $ 1.2 Million In Crypto

Tax evasion took the highest percentage – 72% – of all time spent on direct investigations. It included various crimes such as cybercrime, including crypto crimes, identity theft, and corporate fraud.

IRS seized $ 3.5 billion in crypto

The IRS Criminal Investigation Unit seized billions of dollars in Bitcoin and other cryptocurrencies during fiscal year 2021. These seizures were linked to cases involving a range of criminal activity. However, the most publicized crypto case was the seizure of over $ 1 billion in Bitcoin. This seizure was linked to Silk Road, an online black market and the first modern darknet market closed by law enforcement in 2013.

A federal jury in New York in 2015 sentenced Silk Road creator Ross Ulbricht to seven counts. After a lengthy investigation by the IRS Cyber ​​Crime Unit (CCU), special agents seized over $ 1 billion worth of Bitcoin in November 2020. It was the largest seizure of cryptocurrency from the history of the United States.

In April 2021, the Criminal Investigation Unit arrested Roman Sterlingov, 32. It has reportedly operated the oldest bitcoin money laundering service – Bitcoin Fog – on the darknet since 2011. Throughout its operation, Bitcoin Fog has moved Bitcoin valued at around $ 335 million at the time of transactions. The US Department of Justice has charged Sterlingov with money laundering, operating an unlicensed money transfer business, and unlicensed money transmission in the District of Columbia.

Total crypto market at $ 2.590 billion | Source: Total Crypto Market Cap from TradingView.com

There was also the case of a former Microsoft software developer who embezzled $ 10 million from the company. He then used a Bitcoin mixing service to hide the proceeds. In November 2020, the Seattle U.S. District Court sentenced him to nine years in prison for 18 federal crimes related to his scheme.

Speaking to Bloomberg, IRS Chief Criminal Investigations Jim Lee said he expects the trend of crypto foreclosures to continue in fiscal 2022. “We are seeing the trend in crypto foreclosures. crypto involved in a number of our crimes as we go along. “

Fight against cybercrime

According to the report, cybercrime in the United States is growing at an exponential rate. Therefore, the Criminal Investigation Unit has implemented a cybercrime program since 2015 to address this. He added that he had prioritized training on the complex cyber-financial criminal patterns related to cryptocurrency and blockchain. As part of this effort, the Criminal Investigation Unit is launching an Advanced Collaboration & Data Center (ACDC) in Northern Virginia in 2022.

Related reading | House passes $ 1 trillion infrastructure bill; Implications for the American crypto community

Recently, Congress gave the IRS more oversight over cryptocurrency transactions in the infrastructure bill that President Joe Biden enacted earlier this week. The law would require crypto brokers to track and report transactions to the IRS. As a result, giving them more visibility on virtual currency exchanges.

The IRS could also benefit from the $ 80 billion funding offered by Democrats, as part of Biden’s Build Back Better plan. Jim Lee explained that with the money, he could hire an additional 250 to 300 special agents. In addition to investing in systems to identify and track cybercrimes.

Image presented by Forbes, chart from TradingView.com

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