According to recent reports, 19 alleged gang members in Essex and Suffolk have been apprehended in a six-month investigation regarding these individuals being involved in the sale of cocaine and crack across Essex, Suffolk, Hertfordshire, and London. After running out of places to hold money, the group turned to Bitcoin to hide massive amounts of capital inflows.
UK Gang Leveraging Bitcoin
In a recent media report, a six month investigation lead to 19 gang members being taken down in connection to the sale of cocaine and crack across Essex, Suffolk, Hertfordshire, and London. For two years, it is believed that this group has been selling 3 kilos of cocaine per week to nearly 10 county lines gangs residing in the South East.
The network was doing well, seeing about £90,000 a day in pure profits. With business booming, it was becoming extremely difficult to hide incoming funds. The group eventually flocked to Bitcoin, due to the anonymity behind the world’s largest digital currency. According to the reports, there was a point where the gang was deploying £120,000 a week into Bitcoin following the sale of various drugs.
Bitcoin ATM / Cashpoints
After amassing large amounts of money on a weekly basis, the group was depositing money into cashpoints, which ultimately turns the cash into Bitcoin. Typically speaking, cashpoints are Bitcoin ATM’s that allow for cash deposits. After depositing cash into a machine, that cash is turned into Bitcoin which is then sent to a persons digital wallet. Since cryptocurrency wallets do not have names affiliated with them, it can be a complex process to understand who is behind each wallet.
With the gang members leveraging Bitcoin, it is also believed that their wealthy clients were sending direct Bitcoin payments to expedite the process. If you are sending Bitcoin between two different BTC addresses, there are really no restrictions since a central party is not monitoring the transaction. Opposed to making small installments, the gang was accepting large BTC payments to cover large drug deliveries. In terms of delivery, the gang was employing teenagers to make the deliveries.
It is a known fact that criminal groups do not use traditional methods for communication. These groups look for encrypted communication portals that are also difficult to monitor. The UK gang members were directing the distribution network through EncroChat, which is an encrypted communications source. During the on-going investigation, the police were able to eventually hack EncroChat.
Detective Chief Inspector Lewis Basford stated that:
“This is the UK’s first county line gang using Bitcoin. They started using it as they were making so much money they didn’t know what to do with it.”
There was around £100,000 in cash discovered during the raids, in addition to drugs and weapons. In terms of Bitcoin, investigators are hoping to uncover about £2million with the account codes they collected. It is not clear what they mean with “account codes,” but it is best believed that they are referring to Bitcoin addresses and/or private keys.
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