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According to the Connecticut State Police, the emerging virtual cryptocurrency market is prone to scams and has stolen millions of dollars from state residents. Cryptocurrency is available at more than 500 kiosks in the city and most residents impacted by crypto fraud were over the age of sixty.
One victim from eastern Connecticut lost over $6 million and the criminal may be out of the US, stated a police investigator, who admitted that the financial crimes often require time-consuming research and court-approved search warrants.
Det. Matthew Hogan, the State Police official Eastern District Major Crime Squad, elaborated, stating that the partially regulated industry where numerous kiosks, that are not connected to traditional banks, have automatic teller machines that can become crime scenes and cause residents to lose thousands of dollars in crooked transactions that are tough to crack.
Hogan stated, “Luckily, we were able to locate and seize some of these stolen assets using our tracing software.” The kiosks, operated by about 20 different firms, charge cash for virtual currencies such as BTC, which is supposed to be transferred to customers’ eWallet. He mentioned that a Photo ID is only required for transactions exceeding $3000.
Hogan further stated that in a remote testimony from his office to lawmakers in the Legislative Office Building, “The trail always exists, it’s going to be there forever. The question is whether or not we can get to the assets quickly enough to potentially seize and return them to the victim. So by the time we get through a search warrant process, a lot of times this money has moved three or four hops to a wallet that is now overseas with an entity (where) we have no jurisdiction. Luckily for us, there are some of these exchanges who are cooperative with U.S. law enforcement strictly on letterhead, but that number is fleeting.”
In 2022, the hackers stole $3.8 billion nationally. The higher the amount of individual theft the more sophisticated the hackers, Hogan emphasised. He further stated, “They’ll do as many different layering techniques in the money-laundering process to obfuscate where they’re putting the money, they’ll bridge it with other tokens. They’ll move it to other blockchains. “They’ll change it to other things to make it more confusing for us.”
The Co-chairman of the Committee, State Sen. Patricia Billie Miller, D-Stamford, asked Hogan about the measures an average consumer interested in virtual currency should take to avoid scams. Hogan replied, “Don’t use cryptocurrency ATM machines, Between their transaction rates right now – between 11 and 25 percent – there’s really no reason to use them. If you’re a consumer and you want to purchase any kind of cryptocurrency, Bitcoin, Ethereum to any kind of token, you can easily open an account on Coinbase, Binance, Kucoin, or any of these organisations and purchase them. There’s no reason to walk into the worst parts of a city with cash in hand and transact on one of these ATM machines.”