Bitcoin & Crypto & NFT News
The privacy-focused digital currency monero has captured the attention of the Federal Bureau of Investigation (FBI), which has expressed concerns over its use among criminals.
Joseph Battaglia, a special agent working at the FBI’s Cyber Division in New York City, said during an event last week that widespread use of the increasingly popular cryptocurrency might impact the way the agency conducts investigations.
Addressing a group of about 150 law students at New York’s Fordham University, he said:
“There are obviously going to be issues if some of the more difficult to work with cryptocurrencies become popular. Monero is one that comes to mind, where its not very obvious what the transaction path is or what the actual value of the transaction is except to the end users.”
Launched in April 2014, monero (XMR) is a cryptocurrency with enhanced privacy features. A fork of the Bytecoin codebase, monero leverages identity-obscuring ring signatures to make it unclear which funds have been sent by whom and to whom.
The cryptocurrency saw its price soar in 2016, climbing from about $0.50 at the beginning of the year to about $12, a 2,760% increase.
Since 2013, the agency has seen “enormous growth” in the number of cases involving digital currency payments, according to Battaglia. Of those, 75% involved bitcoin, he said, though he mentioned litecoin and monero as other cryptocurrencies the agency has encountered thus far.
The FBI Cyber Division looks into a diverse range of online criminal activity.
In 2015, the agency reported ransomware losses of $18m from a single type of software. Since at least last October, the agency has been investigating a $1.3m bitcoin theft tied to the hacking of the Bitfinex exchange.
Battaglia’s statements came after his “high-level” account of a typical cryptocurrency investigation given at the event, which one of a series of blockchain workshops co-hosted with IBM.
Other panelists included Brigid McDermott, vice president of blockchain business development at IBM; Dan Ramsden, a Fordham Business School adjunct professor; and Gregory Xethalis, a partner at law firm Kaye Scholer.
Following the event, the special agent said he couldn’t provide additional details specifically pertaining to the FBI’s investigative techniques surrounding monero when asked by CoinDesk.
During the panel, however, Battaglia described the FBI as “a reactionary organization”, adding that, instead of trying to predict the direction that cryptocurrency use might go, the agency has adopted a wait-and-see approach.
“We’re going to look at what catches on, and what becomes mainstream, and then we’re going to keep an eye on that, because usually not long after that is when you start to see some of the fraud and some of the more nefarious uses of that technology.”
Photo credit: Bruce Gilbert / Fordham University