Ryan Farace, popularly known by the nickname Xanaxman, a dark web drug dealer and convicted felon, might just spend the rest of his life in prison. He has been handed 57 years in prison for laundering $137 million worth of Bitcoin.
Farace’s father is also being indicted, as the two allegedly ran a drug-dealing operation from behind bars and laundered some huge amount of money – all of this while Farace was in prison for his previous crimes! An unsealed indictment released by the Maryland federal court last week indicated the duo run their operations from October 2019 to April 2021.
The US Drug Enforcement Administration seized $137 million worth of bitcoins from sources linked to Farace. Agents found nearly 3,000 coins in their raids; February’s haul was valued at a whopping 2,875 BTC while the recent raid nabbed only 59 because bitcoin prices have been on a steady rise since then!
Not New To The Game
It’s no surprise that drug dealers are turning to cryptocurrencies as a means of payment. This is because it enables them to make transactions anonymously, protecting their identity from authorities and buyers alike.
Farace was arrested for selling Alprazolam on the dark web (a space where data isn’t transmitted via regular channels), which makes him more vulnerable than if he were operating in broad daylight with physical currency exchanges nearby.
Accused of selling drugs, Nick Farace was ordered to forfeit 4,000 Bitcoin. That amount is now worth $187 million and has been seized by the Department of Justice Drug Enforcement Administration which can be used for drug rehabilitation programs that are currently struggling with funding from Congress due to recent government shutdowns.
With his share of the $4.3 million worth in Bitcoin, and seizing property from him that he obtained through illegal means like cash or other goods, it was a sizeable win for law enforcement officials who have been cracking down on cryptos’ use for illicit activities.
Oftentimes, drug dealers make more money than they’ll ever be able to spend in their lifetime.
But when the feds are hot on your trail and you have an entire team of police officers outside waiting for you with guns drawn, it’s time to pull out all stops and throw yourself a good old-fashioned going away party before being carted off into custody.
Farace’s arrest may have been the catalyst for his theft. However, new court documents do not specify if this was a case of him stealing Bitcoins while in prison or it is just part of an ongoing investigation into Bitcoin crimes that lead to arrests like Farace’s.
More Bad Than Good?
While many criminals are turning away from traditional currencies as they try to find ways out of their criminal activity with bitcoin exchanges being shut down due to high-risk levels caused by money laundering investigations all around the world, people who commit frauds such as Farace seem unafraid at taking advantage because law enforcement agencies can’t seize what isn’t there currently which makes tracking them difficult.
The government has always been opposed to the idea of adopting a cryptocurrency like bitcoin or ether because it can be used for illegal purposes on both sides – as an exchange system for drugs between buyers and sellers alike without leaving traces with law enforcements agencies nor banks.
This was among their arguments against its adoption back then (even though now many people believe that anonymity might not be such a bad thing). But thanks to some savvy techies out there who also see value in blockchain technology.
The Silk Road was one of the largest illegal marketplaces for the distribution of drugs. However, in 2013 a bust from this marketplace revealed that around $800 million had been moved to dark web operations only so far this year.
Chainalysis has found that these currencies are being used for both legal and illegal purposes as there is an uncertain future ahead if regulation continues at its current pace.