herald

Monday 18 December 2017

Fear of cash seizures has led cartel to use bitcoin currency

Servers used as a Bitcoin 'farm' in Amsterdam
Servers used as a Bitcoin 'farm' in Amsterdam

The revelation that Dutch police uncovered a "bitcoin farm" in a fortified Amsterdam apartment used by the Kinahan cartel for drug transactions is evidence of the mob's reluctance to use cash for their international transactions.

Sources say that the use of bitcoin is most likely as a result of the huge amount of cash seizures against the cartel since their deadly feud with the Hutch mob began in February of last year.

It is estimated that the cartel has lost a total of around €4m in cash since the major garda drive against them started 18 months ago.

"It is clearly easier for the cartel to now trade in bitcoin rather than cash because it is less likely that this currency will be seized from them," a source said.

More than a dozen people are now before the courts facing money laundering charges and the cartel's operations have been severely hampered as millions of euro has been seized from them.

Bitcoin is a form of virtual global currency that is stored electronically and used to buy goods online.

The anonymous nature of bitcoin, which was created in 2009, has made it popular with groups involved in many different forms of criminality, including those who trade on the so-called Dark Web.

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Bitcoin farming or mining is the process of adding and verifying transactions to bitcoin's public ledger and also the means by which new bitcoin are released.

Gardai first became aware of bitcoin being used by drugs trafficking gangs here in December 2014, when they busted a Dublin man who had used sophisticated encryption techniques to traffic drugs on the internet. They discovered more than €1.5m in the digital currency on computers he controlled.

It has emerged that the Criminal Assets Bureau first seized bitcoin in Ireland in 2015.

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