Kolkata: The Narcotics Control Bureau (NCB) has expressed concerns over the increasing usage of cryptocurrencies like Bitcoin by sex rackets, drugs and arms dealers as a mode of monetary transactions.
In 2015, NCB, for the first time intercepted two such syndicates that were involved in drug peddling using sophisticated cyber tools such as ‘Darknet’ and ‘Bitcoin’. According to the bureau, over the past three years, cryptocurrencies like Bitcoin have become a mode of illegal transaction for those involved in arms, sex and drug racketeering.
Speaking to News18, Kolkata Police Commissioner Rajeev Kumar said, “Yes it is a fact that cryptocurrencies are being used for illegal purposes too. Law enforcement agencies are yet to find a good mechanism to trace these transactions owing to the strong built-in anonymity in the whole process.”
According to experts, in the recent years, crime syndicates have increasingly grown dependent on cryptocurrency as it allows “illegal operations” with complete secrecy.
Bitcoin and the wide world of the Internet are difficult to track and probe agencies are finding it hard to trace users who carry out such transactions.
NCB Zonal Director, Dilip Kumar Srivastava said, “Earlier, such illegal activities used to run on hawala but post-demonetisation, hawala transactions are not much in use and now, criminals have adapted to cryptocurrencies. Most of the arrested persons in recent times confessed to be indulged in cryptocurrency transactions in making payments. This became a national concern and there is an urgent need to address the menace with utmost priority.”
He added, “Yesterday we arrested a Kolkata-based architect and a drug peddler known as Rhythm Ray. He has confessed that a gang of Israeli and Russian tourists are involved in supplying banned drugs to Indian agents using digital currency Bitcoin for transactions. We have already alerted our counterparts in Goa. The cryptocurrencies have become a menace as it is difficult to track the sender and receiver. We need to rope in more IT experts to overcome this issue.”
Rhythm Ray was arrested from New Town area along with 148 blots of LSD and MDMA Ecstasy candies. He confessed to using Bitcoin and 'Dark Web' for monetary transactions.
“They are well-educated youths who use all kinds of latest digital platforms, including Bitcoin to place their orders. There are people in Bengaluru who are also part of this gang and we are probing the matter. Bitcoin is making our job difficult to track these peddlers and therefore we are planning to take the help of IT experts to track the money trail,” Srivastava said.
Bivas Chatterjee, Special Public Prosecutor for Cyber Law and Electronics Evidence, said, “Bitcoin is decentralized, which means the system works without a central repository, unlike banking and other online financial services. When the first Bitcoin was created in 2009, it did not have any perceived value, but currently one Bitcoin is worth approximately Rs 9,22,288.42 (last months rate). Investigating authorities are facing hurdles while they conduct investigation into crimes involving cryptocurrencies or Bitcoins because of its anonymity assured by mathematical precision.”
“This could lead to an economic catastrophe in the future, especially if everything remains uncontrolled and unregulated. When the Chinese government has already banned the new digital currencies for any kind of fund raising and the Russian court has also declared cryptocurrency as illegal, the Indian government should also take some measures.”