Bitcoin Is Actually Traceable


  • FBI recovers ransom paid in Bitcoin
  • Bitcoin is not as hard to trace as you think
  • Criminals choosing Monero over Bitcoin

The US justice departments recovery of millions worth of Bitcoin paid to the Darkside ransomware group early last month showed that the digital currency is not as anonymous as speculated. 

Bitcoin was made popular by fans as a secure, decentralized and most importantly anonymous way to conduct transactions outside the traditional government-controlled financial system and its taxes and regulations. Criminals, Tax evaders and drug dealers quickly flocked to the currency. 

In June 2021, the US justice department was able to trace and recover 63.7 of the 75 Bitcoins ($2.3Million of the $4.3Million) ransom that the colonial pipeline paid to the notorious Darkside in exchange for the restoration of services after its attack had shut down the company’s computer systems resulting in fuel shortages and the spike in gasoline prices. 

“While these individuals believe they operate anonymously in the digital space, we have the skill and tenacity to identify and prosecute these actors to the full extent of the law and seize their criminal proceeds,” Maria Chapa Lopez, then the U.S. attorney for the Middle District of Florida, said when the case was announced. 

Bitcoin is traceable. It turns out that all Bitcoin transactions are public, traceable and are permanently stored in the cryptocurrency fixed ledger called the Blockchain. The Bitcoin ledger can be easily accessed by anyone who has access to the Blockchain. 

Is there an untraceable crypto-currency? 

Bitcoin is said to be one of the most transparent currencies there is. “In the end, “cryptocurrencies are more transparent than most other forms of value transfer,” said Madeleine Kennedy, a spokeswoman for Chainalysis, the start-up that traces cryptocurrency payments.  

She added that Bitcoin is more transparent than cash as with cash there may never be a record of exchange but with Bitcoin, everything is recorded. 

However, it has been reported that ransomware criminals, drug dealers and tax evaders are now favouring the more private, decentralized and secure digital currency called Monero over Bitcoin. Unlike Bitcoin, Monero does not let its users view the transaction history or balance of other users.

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