I believe I speak on behalf of all virtual currencies enthusiasts when I say that we all love what Cryptocurrencies offer. Digital currencies interesting features are what make them unique more so when you compare to what fiat currencies have to offer on the other hand. Complete decentralization and ability to make anonymous transactions are just some of these amazing features that come with Cryptocurrencies. More often than not, with every new technology there is always a fault and virtual currencies are not any different. Their main con is of course being how they are prone to the risk of online attacks with high profile cases reported in the past.

On to another con that’s related to events that happened lately, criminals and especially drug dealers have found a way to exploit the anonymity nature of Cryptocurrencies where they enjoy the illicit proceeds of narcotic smuggling which is now worrying US officials. The US Immigration and Customs Enforcement(ICE) according to a statement released on Tuesday Mar 21, has seen a substantial increase in cases involving virtual currencies in the drug trade. Addressing the Congress, Matthew Allen who is an assistant director for one of the Department of Homeland Security’s investigative arms, said that Homeland Security Investigation(HSI) uses blockchain analysis to track Cryptocurrencies payments which are connected to heroin and fentanyl trades.

The ICE investigates a wide range of domestic and international activities arising from domestic and international arising from illegal movement of people and goods which includes smuggling of narcotics. This is not the first time ICE is addressing this issue, in 2013 it addressed a Senate Committee on Homeland Security and Governmental Affairs its efforts to combat the exploitation of virtual currencies platforms by transnational organized criminals. In May 2013, Bitcoin exchanger Mt.Gox – before it collapsed – was moving around $60 million per month to a number of internet black markets operating on the Tor network were seized for operating a money service business in the US without a license. These funds were associated with illegal purchase of drugs and fire arms.

In October that same year, The ICE in collaboration with the FBI, the DEA and IRS managed to seize a dark web named Silk Road. Silk Road served as an online international market place where users could buy and sell controlled substances and other contraband anonymously over the internet. Silk Road accepted only Bitcoin as the payment mechanism on the site and during the course of the investigation, ICE agents identified Bitcoins worth approximately $3.6 million as used by buyers and sellers on the site.

Through the statement released on Tuesday, ICE pointed out that it had seen a substantial increase in cases in which private parties are acting as money service businesses to exchange digital currencies into fiat currencies and as a result drug dealers are enjoying handsome proceeds of narcotics smuggling.

Currently there are Cryptocurrencies that have enhanced their privacy features such that their transactions are completely untraceable. Coins such as Monero have perfected this feature making them very desirable to criminals and at the same time worrying government officials.

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