IRS agents were posing as crypto traders under the simple nickname Mr.Coins to track down traffickers of illegal substances on the darknet.
Undercover actions have long been not news to the IRS. However, this is the first time that the organization's agents have exposed criminals disguised as cryptocurrency traders. To the delight of everyone who still believes in television, the pseudo-anonymity of the crypto industry still attracts many money launderers, drug merchants, and other residents of the most remote corners of the Internet. According to analysts at Chainalysis, in 2020 alone, the turnover of illegal organizations exceeded $5 billion.
To draw the attention of attackers to their LocalCryptos profile, the IRS advertised the sale of Bitcoins over a year ago, in June 2020. Then Mr.Coins invited everyone to buy BTC in cash from him at a price higher than the market average using the postal service. For the sale, the organization's agents urged potential buyers to use the encrypted messaging by Wickr, or WhatsApp, to deflect unnecessary suspicions.
Soon, the claimed drug dealer Chase Hite of Evansville, Indiana, then known to the IRS as Lucifallen21, was contacted. Naturally, there was no question of transferring the entire transaction amount of $180,000 cash in one payment. The merchant might have suspected something was wrong. Therefore, it was decided to sell in parts.
First, the buyer decided to purchase a small number of Bitcoins about 1.59 BTC for $15,040 at the exchange rate at that time, having previously wrapped the cash in clothes and sent it by mail. A month later, he acquired another 1.34 BTC and 45.2 XMR for $20,000, and a little later made additional purchases for a total of over $65,000.
Only in March 2021, when the investigators finally prepared for the completion of the special operation, a parcel with $28,000 in cash sent by the drug dealer by the mail service was caught. Agents informed Lucifallen21 that they had not received funds from him, and the post office referred to the loss of the package. When the attacker decided to call after finding out the details, the IRS representatives finally found out his contact number, tracing the rest of his data.
Along with the last package, the IRS also managed to obtain Hite's prints, confirming early suspicions using a database. The service filed charges in the Eastern District Court of New York back in July 2021. Now she has a trial ahead, although the seller of the prohibited substances has not yet filed a plea of guilt.
Previously, the IRS had already impersonated a drug dealer, trying to find out the details of the leaders of the crypto transaction anonymizer Bitcoin Fog, and also pretended to be a fake goods dealer from Gucci in an attempt to reach an operator who changed cash for Bitcoins.
It's funny that Mr.Coins' profile received 100% positive reviews and is still available on LocalCryptos. But if you are an intruder, then perhaps you should refrain from his business proposals.