$20 Million: DOJ Seizes Bitcoin in Operation Targeting Darknet Market Vendors

Francisco Memoria
  • Authorities recently revealed they've seized over $20 million worth of bitcoin and other cryptocurrencies.
  • Their operation led to the arrest of 35 darkweb drug dealers, and the seizure of various illegal weapons and drugs.

The US Department of Justice (DOJ), in cooperation with various other government agencies, has recently seized over 2,000 bitcoins and other cryptocurrencies after cracking down on darknet market vendors. Per the DOJ, over $20 million worth of cryptocurrencies were seized.

Through an announcement published by the Department of Justice, the operation was spearheaded by special agents of Homeland Security Investigations (HSI), which posed as money launderers on various darknet marketplaces.

This way, they were reportedly able to identify “numerous vendors of illicit goods,” which saw authorities open more than 90 active cases around the country. These led to the arrest of 35 darknet vendors, and the seizure of cryptocurrency miners, illegal weapons, drugs, $3.6 million in fiat and gold bars, and “2,000 bitcoins and other cryptocurrencies, with an approximate value of more than $20 million.”

Referring to the operation’s success, Deputy Attorney General Rod J. Rosenstein stated:

Criminals who think that they are safe on the Darknet are wrong… We can expose their networks, and we are determined to bring them to justice. Today, we arrested more than 35 alleged Darknet vendors.  We seized their weapons, their drugs, and $23.6 million of their ill-gotten gains.

Rod J. Rosenstein

Rosenstein revealed the nationwide effort is set to reduce the supply of drugs, and specifically mentioned fentanyl, a drug various darknet market vendors frown upon for being an extremely dangerous one, as it’s said an amount “as small as a grain of sand” can kill an adult. 100 grams of fentanyl were seized in the operation.

The seizures add to an existing pool of cryptocurrencies the US government has seized in the past. These could eventually be auctioned off into the market, as authorities have auctioned 80,000 BTC seized from the now-defunct darknet market Silk Road.

The DOJ’s announcement further touted the bust, adding that “the veil has been lifted,” and that “every criminal is within arm’s reach of the law.” Secret Service Assistant Director Kenneth Jenkins added that:

The Secret Service is proud to work with our law enforcement partners to help combat one of the largest threats to the U.S. financial infrastructure, money laundering with virtual currency.

Kenneth Jenkins

Notably these comments are seemingly part of an “intimidation game” authorities have been playing with darknet market vendors. Last year, when various US agencies coordinated with the Dutch police to take down two of the darknet’s then biggest markets, AlphaBay and Hansa, Dutch authorities told darknet vendors “you have our attention.”

As CryptoGlobe reported earlier this month, authorities have recently arrested a well-known darknet market vendor known as OxyMonster after tracking him down through his bitcoin transactions.

Billionaire Novogratz: Altcoins Won't Pump Like In 2017 Bull Run, Bitcoin Will Dominate

It appears that cryptocurrency prices have finally begun to recover after enduring an extended bear market which lasted throughout 2018.

As the market capitalization of Bitcoin (BTC) and other major cryptoassets continues to rise, several analysts have been drawing comparisons between what they’re seeing in the current market and what they observed during the historic bull market of late 2017 and early 2018.

Commenting on the recent crypto market price movements via Twitter, Ran NeuNer, the host of the CNBC Africa Trader show, remarked:

The market is running but we still haven’t seen the crazy alt pumps, pumps where coins do 40% in a day...is it coming?

Bitcoin To “Outperform” All Other Cryptos “This Time”

As the bitcoin price begins to recover, there have been many predictions made regarding the anticipated performance of altcoins. Twitter user “Crypto Bitlord” (@Crypto_Bitlord), a widely-followed digital asset market analyst, believes XRP, which currently has a market cap of around $16.3 billion, may trade as high as $10.

However, prominent crypto investor Michael Novogratz believes that digital asset traders are a lot smarter this time, when compared to some of the bad investment decisions they might have made during the initial coin offering (ICO) craze of 2017.

Novogratz, who’s the founder and CEO of Galaxy Digital, a full-service crypto merchant bank, has predicted that in this market run, Bitcoin will “outperform” all other cryptoassets.

On May 16th, 2019, the Bitcoin price surged to a 2019 high of $8,373 according to CryptoCompare data. In response to bitcoin’s recent price movements, Juan Villaverde, the Chief Analyst at Weiss Crypto Ratings, told CryptoGlobe: 

Bitcoin could fall to as low as $4,400. But [if] it does, it will be the best Bitcoin buying opportunity since 2015.

“More Good News For New Bitcoin Users”

Villaverde, an econometrician and mathematician focused on developing various crypto index models at Weiss Ratings, believes bitcoin would be a great buy at a lower price (as suggested above) because of the following reasons:

  • “The usage of Bitcoin is near all-time highs – 450,000 transactions per day. That’s up from a low of 150,000 in April of 2018 and approaching the all-time high of 490,000 in December of 2017.”
  • “Despite the high transaction volume, fees on the Bitcoin network are at their lowest levels since August of 2017 – more good news for users.”
  • “The Bitcoin block size is now greater than ever before, thanks to the Segwit technology upgrade.”

Villaverde further noted that the predictions are “based on studying the time patterns in Bitcoin's rises and falls throughout its 9 year trading history.” He explained that the time patterns have been analyzed by using an “algorithm-based market cycles model.”

The Chief Analyst at Weiss Ratings also mentioned that the bear market “ended on December 15th 2018 and the model confirmed this shift in trend on March 26th of this year.”

He added:

Then, after the rally that took place starting on April 25th, the same model told me a new bull market was now underway. The same model indicated a 30% to 45% correction due as of late April-early May and we seem to be experiencing that right now.