Cryptocurrencies have been in the game for a long time, but they are still a popular option if one wants to do illegal things on the dark web.
Because of the illegal things that can be done with crypto, Chainalysis is already working with governments to trace and seize the ill-gotten crypto.
Today, the company announced a new program that will help governments keep an eye on their storage of legally-seized virtual assets.
Last week, nearly 70,000 Bitcoins linked to the Silk Road, which had been “sleeping” since its closure in 2013, were transferred to a government-controlled wallet. In a forfeiture complaint, the Department of Justice mentioned that it used a “third party bitcoin attribution company to analyze Bitcoin transactions executed by Silk Road.” Since then, Chainalysis has taken responsibility for the analysis.
After the court-ordered forfeiture, government-seized crypto is typically liquidated at auctions held by US Marshall Service on their terms: it then determines how many auctions have been saved and its size each block sold.
If, for instance, the auctioneers aren’t delicate with their approach, there could be consequences for the market. “If the Department of Justice decides to market-sell those Bitcoins, you’d be seeing a significant dip, as it will go through all orderbooks,” noted Amsterdam-based trader Michaël van de Poppe.
Chainalysis claimed that the new asset realization program would improve storage and track the seized assets in this window after the seizure and before the eventual forfeiture.
A partner company, Asset Reality, will bolster that effort by providing “strategic advisory services and training regarding cryptocurrency and other complex assets,” as mentioned in a press release.
Chainalysis didn’t immediately respond to a request for further comment.
Chainalysis executive Jason Bonds further enlightened the statement: “As our government partners become more successful in rooting out bad actors, assisting them with asset recovery and realization is a natural next step,” he said.
Although the most recent partnership was with the US government, the company remained open to working with governments and insolvency agencies from across the world; this is another bad sign for criminals who want to make a few virtual bucks on the dark web.
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