WASHINGTON—The U.S. Department of Homeland Security (DHS) has developed a cryptocurrency intelligence program aimed identifying unlicensed crypto businesses using P2P sites, online forums, and darknet markets.
The DHS released its budget overview for the fiscal year 2021, and in the document revealed it has developed a Cryptocurrency Intelligence Program (CIP) it said “identifies unlicensed money services businesses in the form of independent cryptocurrency brokers’ use of peer-to-peer (P2P) sites, online forums and classified advertisements, and darknet markets (DNM) to engage in unlicensed money services businesses (MSB) activity,” Bitcoin.com reported.
According to the DHS, “A large portion of these unlicensed MSBs are engaged in laundering narcotics proceeds, including opioid trafficking.”
The U.S. Immigration and Customs Enforcement (ICE) agency, under the DHS, has raised concerns over P2P platforms several times over the years. It has noted unlicensed P2P activities have continually presented “a significant challenge to law enforcement.” According to ICE, “Bitcoin and other virtual currencies are the preferred payment method in darknet markets. It is common for unlicensed P2P exchangers to obtain their bitcoin from selling illicit goods and services on darknet markets.”
The biggest problem darknet market vendors face is converting virtual currency into traditional fiat currency. To avoid reporting requirements, illicit vendors turn to P2P exchangers or become P2P exchangers themselves in order to liquidate their virtual currency, Bitcoin.com said, citing an ICE report.