DEA: Blockchain Transactions Are Not Completely Anonymous

DEA: Blockchain Transactions Are Not Completely Anonymous
The United States Drug Enforcement Administration (DEA) says it is possible to track blockchain transactions and the movement of cryptocurrencies. Photo Credit: Material Handling and Logistics

The United States Drug Enforcement Administration (DEA) says it can track blockchain transactions through the process of converting of digital assets to fiat currency.

According to DEA’s Special Agent Lilita Infante, despite the much touted anonymity of cryptocurrencies like bitcoin which are built on the blockchain technology, it was in fact possible for U.S. security agencies to track their movement during transactions.

“The blockchain actually gives us a lot of tools to be able to identify people. I actually want them to keep using them,” Infante said in an interview with Bloomberg.

Due to their discrete nature and transaction speed, cryptocurrencies are highly favored by criminals involved in illegal activities like money laundering, terrorism and drug trafficking. Indeed, in 2013, when the sector was still in its early days, an estimated 90 percent of all crypto transactions were used for illegal purposes.


That number according to Infante, has now fallen to just 10 percent of all transactions as the market today is dominated by speculative retail investors.

“The volume has grown tremendously, the amount of transactions and the dollar value has grown tremendously over the years in criminal activity, but the ratio has decreased. The majority of transactions are used for price speculation,” she said.

Infante, a member of the DEA’s special 10-person Cyber Investigative Task Force did not go into the details of how the agency could track crypto transactions but said the agency’s blockchain analysis allows it to identify the owners of bitcoin addresses and even track privacy focused cryptos like Monero or Zcash.

The DEA’s claims are however not novel, in January, bitcoin mining firm Bitfury made similar claims when it announced that it had developed a procedure for determining the address of bitcoin users through an analysis of Blockchain data.