The Internal Revenue Service’s Criminal Investigations Unit (IRS-CI) seized $3.5 billion from cryptocurrency-related fraud cases over the fiscal year of 2021, according to an annual report published by the agency, underscoring how the booming sector has also sparked a rise in the illicit use of crypto.
According to the IRS-CI, 93% of the total money they seized this year came from crypto-related cases, the latest sign that fraudsters and scammers have found a way to leverage the soaring popularity of digital coins to their advantage.
While 2021 isn’t officially over, the amount of funds stolen through hacks and fraud within the cryptocurrency sector this year is likely to eclipse previous years. The most obvious reason being that the asset class has more than quadrupled, according to data from Trading View.
Blockchain forensics firm Chainalysis estimates that illicit funds in cryptocurrency amount to a slim 1% of all cryptocurrency transactions, suggesting crypto is used far less for illegal activity than some critics have argued. But with the asset class’s total market capitalization nearly $3 trillion dollars, that 1% sum translates into at least $20 billion worth of illicit cryptocurrency transactions.
The tax agency’s CI unit remains one of the largest and oldest law enforcement units working investigations within this space. Major early cases for the unit included the billion dollar seizure of assets from the online drug marketplace, Silk Road as well as the 2013 hack…
