- Two Chinese intelligence officers have been accused of bribing a U.S. government official with $61,000 Bitcoin in an attempt to obtain Huawei investigation documents.
- The Department of Justice (DoJ) identified the suspects as Guochun He, and Zheng Wang. He had offered to pay the government official, referred to as “GE-1”, in Bitcoin.
- Multiple charges have been filed against the defendants, who stand to face 60 and 20 years in prison respectively if found guilty.
- Elliptic, a prominent blockchain intelligence outfit, also revealed that the suspects used a Wasabi Wallet mixer to conceal their transactions.
Allegations have emerged from the United States Department of Justice (DoJ) that two Chinese intelligence officers ellegedly attempted to bribe U.S. government staff with $61,000 Bitcoin, in an attempt to illegally obtain documents relating to an investigation on Huawei from the Attorney’s Office for the Eastern District of New York.
The documents referred to the name of the firm as “Company-1”. which a report by the Associated Press has identified as Huawei.
The DoJ identified the suspects as Guochun He and Zheng Wang. The filing states that the suspect, He, had offered to pay a sum of Bitcoin to the government official, referred to in the document as “GE-1”, for the information.
As revealed in the deposition, the defendat paid “GE-1” in two installments, one worth $20,000 USD, and the another worth $41,000 USD. The filing went on to clarify that the U.S. official did not disclose any classified information to the agents.
Charges Against the Suspects
Confirming the arrest of the Chinese intelligence officers, U.S Attorney General Merrick Garland made clear the U.S. Government’s position on the issue.
“The Justice Department will not tolerate attempts by any foreign power to undermine the rule of law upon which our democracy is based,” Garland said.
The DoJ has accused the Chinese Officers of obstruction of justice, alleging that they had attempted to bribe a member of government staff, who is also an agent of the Federal Bureau of Investigation. Among the other charges leveled against Guochun He and Zheng Wang are conspiracy to forcefully repatriate residents of China, attempts to halt criminal investigation, and conspiracy to act as illicit agents of a foreign nation.
The two intelligence officers are currently being detained by United States law enforcement. If convicted according to U.S law, He and Wang could face up to 60 and 20 years in prison repsectively.
Stricter Measures for Crypto Mixer Tools
Prominent blockchain intelligence outfit Elliptic disclosed that the suspects used a Wasabi Wallet mixer to try and cover the traces of their transactions.
Elliptic divulged that its blockchain analytics tools had helped to identify the use of the Mixer tool and the source of the transaction. The involvement of yet another crypto mixer tool in illicit acts outside of the recently sanctioned Tornado Cash will likely draw stricter controls from the U.S government.
In August, the Office of Foreign Assets Control (OFAC) placed a ban on Tornado Cash due to the mixer’s use by hackers targeting operations in the region. In light of this latest revelation, a similar move could potentially be made against Wasabi.
On the Flipside
- Although recent incidents have highlighted the risk of the use of crypto mixers as money laundering tools, they have also proved invaluable in their use to serve unbanked members of society, and in facilitating donations to worthy causes.
Why You Should Care
There has been an increase in the use of digital assets for illicit activities, which could prompt governments worldwide to adopt stricter regulations around cryptocurrencies.
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