US Authorities Uncovers Bitcoin’s Addresses of Blacklisted Iranians
Bitcoin is only anonymous if the authorities want it to be. This statement could not be any clearer judging by the recent actions of the US government against sanctioned Iranians. For the first time ever, the United States Office of Foreign Assets Control (OFAC) linked two specific individuals with their digital currency addresses in a bid to impose sanctions on them for helping to facilitate ransom payments that were made in Bitcoin.
In a statement released on Wednesday, Nov. 28, the Treasury Department branch stated that Iran-based Mohammad Ghorbaniyan and Ali Khorashadizadeh aided Iranian hackers in exchanging their Bitcoin ransom payments into the local currency. OFAC revealed the individuals’ cryptocurrency addresses – a unique combination of random numbers and letters representing a place to send Bitcoins – while casting doubts on the much-touted privacy that Bitcoin payments claim to offer. In addition, this action reveals that the US authorities are ready to battle the malaise of fraudulent activities in the crypto industry head-on.
Treasury Under Secretary for Terrorism and Financial Intelligence, Sigal Mandelker, commented in the statement: “We are publishing digital currency addresses to identify illicit actors operating in the digital currency space. Treasury will aggressively pursue Iran and other rogue regimes attempting to exploit digital currencies and weaknesses in cyber and anti-money laundering/countering financing of terrorism safeguards to further their nefarious objectives.”
For those familiar with the idea behind Bitcoin, the original cryptocurrency was designed to process transactions between anonymous parties and to be outside the realms of government control. But even though transactions are still anonymous, they are still logged on the public database called the blockchain, thus defeating the purpose of privacy for participants involved with it. Also, some companies can track virtual currency movement between wallets.
Little wonder why former Bitcoin enthusiasts are turning their attention to other cryptocurrencies in the search for privacy that cannot be easily breached. This has, in turn, given rise to the popularity of “privacy coins” such as Monero, which claims to give users greater privacy.
OFAC, which did not disclose how it was able to link the addresses to the individuals, noted that cryptocurrency addresses should aid compliance officers in identifying funds and transactions that should be investigated and blocked.
The agency also said that the addresses linked to the Iran-based individuals processed more than 7,000 Bitcoin transactions worth millions of US dollars. According to the organization, “some of those Bitcoins were derived from payments made to attackers that used SamSam ransomware to attack more than 200 victims.”
Bitcoin users can bid goodbye to privacy if the latest action by the US government is anything to go by. The Office of Foreign Assets Control has linked cryptocurrency addresses with two Iran-based individuals over claims that it helped hackers to exchange ransom payments in Bitcoin into local currency. This is the first time ever that this action has taken place.
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