Homeland Security Task Force Tracks Domestic Bitcoin Traders - Bitcoinist.net
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Homeland Security Task Force Tracks Domestic Bitcoin Traders


31 March 2016 – The federal government now has a task force dedicated to tracking and analyzing domestic and foreign “unlicensed bitcoin exchangers.” The task force, part of the Homeland Security Investigations (HSI) branch of the DHS, came to light in a federal affidavit outlining the investigation and arrest of David Burchard for large scale distribution of marijuana on Tor hidden services, under his alias, “Caliconnect”. This kind of inquiry, previously restricted to the FBI cyber crimes unit, has been extended to other federal agencies and HSI’s dedicated involvement carries implications for the US bitcoin community moving forward.

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Bitcoin Surveillance Gets Special Attention From Homeland Security


While it seems that the traditional flaws in operational security have been the main avenue taken by HSI in investigating Burchard, the language in the affidavit implies NSA surveillance had a part in linking his Bitcoin activity to his whereabouts and identity.

Homeland Security

Burchard Affidavit Excerpt

This combined with dedicated domestic investigation of Bitcoin shatters any expectation of privacy for people utilizing local exchanges and other measures for US citizens. The transparent nature of Bitcoin makes it a bad candidate for laundering and malicious activity in the first place, so this revelation raises questions as to the validity of a dedicated task force for tracking clandestine bitcoin transactions.

Some of the information on Burchard also came from the 2013 Silk Road investigation, one marred by corruption, theft, and incompetence on the part of the federal authorities. Homeland Security has one of the worst records when it comes to their investigative branches, and this new HSI task force presents the corrupt elements in the agency even more opportunity. The task force, with its investigation and analysis of a transparent medium of exchange, and surveillance on citizens “to ensure a homeland that is safe, secure, and resilient against terrorism and other hazards” stretches the elastic clause to its limits. The fact that it’s presided over by a famously shady branch of the federal government makes the forecast for Bitcoin independence and privacy that much more grim.

What are your thoughts on increased domestic surveillance and Bitcoin privacy? Leave them in the comments below!

Images Courtesy of DHS, Twitter user Moustache (@lamoustache)

Tyson O'Ham

  • It just never ends does it? Why cant they LEAVE PEOPLE ALONE until they have an injured party like common law requires? oh I forgot they are not about COMMON LAW are they?

  • RJF

    There are much more important things to waste my tax money on then Bitcoin. This is crap and they know it. Funny thing is it won’t change anything and won’t find any criminals. Just another reason we need a change at the top of the food chain.

  • StoneAge

    Interesting that they think they have jurisdiction over someone exchanging property for property. Truth is, if, you are laundering central banking notes.. You’d best stay with what the pro’s use – Bank of America. :-).

  • I was hoping this was an April fools piece. ):

  • Tyson O.

    Wish I could tell you it was

  • JJ1984

    They need to fill the prison cells of the privatised penitentiary industry..
    ..nothing makes a good profit than creating fiat laws to make fiat criminals..

    The government says narcotics are bad for your health. Equally if not even more destructive to society is the high level of obesity among US citizens. Maybe a ban on Mcdonals and Burger King would be far mor appropiate.

  • There is absolutely nothing new about Homeland Security Investigations targeting Bitcoin traders to seize Bitcoins to fund itself. HSI has been using the Patriot Act to target Bitcoin traders for years despite FinCEN telling them that Bitcoins aren’t that big of a deal in the financial criminal world. Cash is still king with criminals.

    I have some insight as to why Homeland Security Investigations now has a Bitcoin Task Force rather than relying on ad hoc Bitcoin seizures and prosecutions around the country. From 2013 to 2014 in Colorado, Homeland Security Special Agent Arran McWhirter and Civil Asset Forfeiture Expert AUSA Michele Korver wasted at least two years and millions of dollars following Bitcoin traders with their Operation Avalanche Task Force which netted very little Bitcoins for the government coffers and caused them great embarrassment. S.A McWhirter and AUSA Korver had an unsubstantiated theory that my middle aged electrical engineer husband had a secret stash of millions of dollars worth of Bitcoins. He did not. He day traded Bitcoins for his own investment. (The details about Homeland Security’s attack on our family can be found at http://www.burtw.com and http://www.jmwagner.com.) My husband was arrested and jailed on the sole spurious criminal charge of not having a business license which was eventually dismissed. Special Agent Arran McWhirter and AUSA Michele Korver, to put it bluntly, screwed up royally. Their task force netted very little in the way of Bitcoin recovery. Two cases (my husband’s and another) were dismissed. Two cases settled only because the defendant’s didn’t have the money to fight the charges. The fifth case was set for trial. If SA McWhirter and AUSA Korver knew what they were doing, they would have known that my husband didn’t have millions of dollars in Bitcoins and that putting a tracker on his car and following him from my home to my daughter’s school to his work to home again was a total waste of resources. I suspect the Homeland Security Bitcoin Task Force is an attempt to expand its asset forfeiture activities with larger and more successful Bitcoin seizures. The HSI agents in Colorado made fools of themselves at our house. I suspect they promised their federal and local law enforcement peers a big bust, glory, and riches (Shame on Sheriff Joe Pelle and Boulder County Sheriff’s Dept while I’m naming names). Instead, their federal peers raided the home of an 8 year old girl, broke her toys, and stole her Christmas money. We call it the Department of Armed Robbers rather than the Department of Homeland Security for a valid reason. Word of advice to all: Always hire an out of state attorney when your federal government attacks you and always use Linux.