Category Archives: Department of Justice

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Us Department of Justice to Auction off 660 Bitcoins

Looking to buy Bitcoin? The US Department of Justice (DOJ) is selling off approximately USD 4.2 million of the cryptocurrency acquired from various criminal proceedings.

 The US Marshals Service (USMS) posted a notice on its website on Thursday detailing the Bitcoin auction. A USD 200,000 deposit is required to take part, with bidders needing to register their interest in the sealed bid auction by 31 October. The official bid for the bitcoins will take place on 5 November

The nature of the sealed bid auction means that participants can neither see other bidders’ offers nor can they adjust their own prices once they have given a figure. Initially, six sets of BTC 100 will be put on offer, followed by one set of BTC 60.

Where did the DOJ get all this crypto?

USMS state that all of the Bitcoin was seized from individuals judged to be involved in illicit activities with their cryptocurrency, made up of ”federal criminal, civil and administrative cases.”

Each individual case is listed with either its case number or the total amount of Bitcoin that was forfeited. Several of the names listed stand out from their high profile cases, such as that of Theresa Tetley and Thomas Mario Costanzo who were both sentenced to jail time after prosecution over Bitcoin-related money laundering.

Restrictions

Being run by the DOJ, there are unsurprisingly restrictions on who may participate in the auction. While non-US residents and nationals are allowed to bid, they will all be subject to a screening process to ensure they do not appear on the U.S. Treasury Department’s Office of Foreign Assets Control list of Specially Designated Nationals.

A US bank account is also required to deposit funds for the purchase, alongside a copy of a government-issued ID and a manually signed  “Bidder Registration Form.”

This is the third case of USMS selling off their Bitcoin haul, with the first instance taking place in January 2018 followed by the second in March, offering BTC 3,800 and BTC 2,100 respectively. Compared to the previous instances, the latest auction has a far smaller amount of Bitcoin going under the hammer.

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Chinese Justice Department Uses Blockchain to Track Parolees

Officials in the southern Chinese city of Zhongshan have instituted a blockchain system to track the movements of those on parole in the district.

The new blockchain network is said to improve the quality of community correction that the justice department can serve, upgrading its ability to track parolees activities around the clock. Monitoring the community prisoners previously had restrictions imposed, including regional and time constraints. The blockchain system, however, lets officials view data at any time from any location.

Changes to the electronic bracelets mean that wearers are no longer required to regularly report their own activities or require officers to make visits to check up on them, meaning less friction is created between parolee and officer.

The new blockchain system also employs data analysis that can detect the possibility of criminals re-offending through sharing the action trajectory and situation of the community prisoners with the Department of Justice. An analysis is done through an accumulative data check of the behavioral tendencies of the parolees and their current situation. If there are any indications that re-offending may occur, staff are triggered to make an early intervention and prevent any criminal activities from occurring.

In this specific use case for blockchain, the Chinese government is able to reduce the manpower required to supervise the offenders, creating both financial savings and preventing potential situations of conflict. Whether it is able to actually reduce the number of re-offending parolees is still a question as the network was only rolled out this month, but the potential to do so is certainly there.

It is not just the government in China committed to developing fresh blockchain solutions; a recent study shows that last year China was responsible for 56% of the world’s blockchain patent applications, with Chinese multinational holding conglomerate Alibaba claiming 10% of the overall total. The study also indicates that the number of blockchain patent filings has increased from just 134 in 2016, to 406 in 2017.

 

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US Department of Justice Opens Criminal Case into Bitcoin Price Manipulations

The US Department of Justice (DOJ) has opened a criminal investigation into whether traders are manipulating the price of Bitcoin and other cryptocurrencies, according to a report published Thursday by Bloomberg.

The most notable concern coming from the DOJ relates to a suspected potential that the volatility of the market creates an opportunity for investors to push price valuations in a way to favor themselves.

Additionally, authorities feel cryptocurrencies are particularly susceptible to fraud due to a concern over the lack of regulations, as well as skepticism that every exchange actively pursues those deceiving the rules of the platform.

Spoofing and wash trading

People familiar with the situation told Bloomberg that the DOJ is specifically looking into spoofing and wash trading from colluding traders. These two illicit tactics are forms of market cheating that have been combated by regulators in the futures and equity markets for years.

Spoofing involves a trader submitting a number of orders, then cancelling them once they are satisfied they have affected the prices enough in the desired direction.

Wash trading involves a cheater creating trades with themselves to create a false impression of market movements, which influences others to move in a specific way.

It was reported that both Bitcoin and Ether are being investigated for this, but the DOJ declined to comment on the case at Bloomberg’s request.

Protecting investors

After a Bitcoin price surge last year spanning between USD 1,000 and USD 20,000, the cryptocurrency industry has found a host of new supporters and investors. The number of ICOs has also skyrocketed, with a growing number of people aware and involved with altcoins.

Regulators across the globe are now seeing the industry as a growing concern, as investors enter the market without a clear understanding of what cryptocurrencies are, and the risks involved.

Cryptocurrency exchange platforms operate internationally, with many remaining unregistered with any government agencies, leading to a heightened fear of fraudulent activities in general.

Of course, the vast majority of platforms maintain there own strict security measures to protect users and are willing to pursue fraudsters, if not only to protect their own reputation.

 

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