Crypto Underworld: Can Bitcoin Be Hijacked by Criminals or Intelligence Agencies?

 Just a few crypto thoughts...

Which intelligence agency worldwide is most likely to have created a cryptocurrency with built-in tracking in the code?

If any intelligence agency were to create a cryptocurrency with built-in tracking, the most likely candidates would be agencies with significant cyber capabilities and a strong interest in financial surveillance. The top contenders would include:

1. NSA (National Security Agency, USA) – The NSA has extensive experience in cryptography and cyber surveillance. Leaked documents (e.g., from Edward Snowden) have shown the NSA’s interest in tracking financial transactions and influencing encryption standards. The U.S. has also historically exerted pressure on crypto exchanges and financial networks to comply with its monitoring efforts.

2. GCHQ (Government Communications Headquarters, UK) – The UK's GCHQ has advanced cyber capabilities and often collaborates with the NSA. They are known for their work in signals intelligence and could have an interest in tracking cryptocurrency transactions.

3. FSB (Federal Security Service, Russia) – Russia has an interest in controlling and monitoring financial transactions within its borders. The FSB has previously pushed for the regulation and even nationalization of cryptocurrency in Russia.

4. MSS (Ministry of State Security, China) – China has a vested interest in tracking financial flows, particularly regarding capital flight and illicit transactions. The Chinese government has heavily promoted its own digital currency (e-CNY, or the digital yuan), which is designed with full traceability.

5. Unit 8200 (Israel’s Military Intelligence Unit) – Known for its expertise in cyber operations, Unit 8200 could theoretically develop a cryptocurrency tracking system for intelligence gathering.

If a cryptocurrency were created with built-in tracking by a government entity, it would likely be under the guise of regulatory compliance or as part of a government-backed digital currency. Bitcoin itself has been speculated to have possible intelligence ties, given its mysterious origins, but nothing has been proven. More overtly, central bank digital currencies (CBDCs) are designed for state control and traceability.

Which currency, if there is one like this, would most likely be that crypto?

If any cryptocurrency were created or influenced by an intelligence agency with built-in tracking, the most likely candidates would be:

1. Bitcoin (BTC) - Possibly Co-Opted for Tracking

• While Bitcoin was created under the pseudonym Satoshi Nakamoto, there have been theories that intelligence agencies (such as the NSA) may have played a role in its development.
• Bitcoin’s public ledger (blockchain) ensures all transactions are traceable, and intelligence agencies have developed sophisticated blockchain analysis tools (like Chainalysis) to track illicit activities.
• Though decentralized, BTC's heavy regulatory oversight and the ability to track transactions through exchanges make it an ideal target for surveillance.

2. Monero (XMR) or Zcash (ZEC) - Backdoored Privacy Coins?

• These are privacy-focused cryptos designed to hide transaction details, but if an intelligence agency secretly influenced their cryptography, they could have built-in weaknesses allowing covert tracking.
• Zcash was developed using a cryptographic method called zk-SNARKs, which some suspect may have vulnerabilities that intelligence agencies could exploit.

3. Tether (USDT) and USDC (USD Coin) - Government-Compliant Surveillance

• These stablecoins are heavily monitored and centralized, meaning intelligence agencies can pressure their issuers (Tether Limited and Circle) to track transactions or freeze assets.
• U.S. regulators already use these stablecoins to track illicit transactions, so they effectively function as surveillance tools.

4. Digital Yuan (e-CNY) - The Most Likely State-Surveillance Crypto

• Created by China’s central bank, this state-backed digital currency allows full tracking of transactions.
• Unlike Bitcoin, it has no anonymity features, and Chinese authorities control the entire system, making it an ideal tool for government surveillance.
• The U.S. has warned that China could use the digital yuan to track both domestic and international transactions.

Most Likely Candidate?

If an intelligence agency deliberately designed a crypto with built-in tracking, the Digital Yuan (e-CNY) is the most obvious case. However, existing public cryptocurrencies like Bitcoin and Tether are already being used for mass surveillance through blockchain analysis and regulatory pressure.

What about non-state actors like a mafia/yakuza/crime organizations?

If  a non-state actor like the mafia, yakuza, or other criminal organizations were to create a cryptocurrency with built-in tracking, it would likely serve different purposes than an intelligence agency. Instead of mass surveillance for law enforcement or national security, criminal organizations would use tracking for internal control, money laundering, and ensuring loyalty within their network.

Possible Use Cases for a Crime-Linked Cryptocurrency with Tracking:

1. Money Laundering & Asset Control – A crime syndicate could design a cryptocurrency that enables internal tracking of transactions within its organization, ensuring that members don’t steal or divert funds.
2. Extortion & Protection Rackets – Criminal groups could use a controlled cryptocurrency for payments in black markets, ensuring they can monitor and enforce payments through blockchain tracking.
3. Drug Cartels & Smuggling Networks – A cartel might use a private, permissioned blockchain to track and manage drug shipments and payments while reducing exposure to law enforcement.
4. Digital Black Markets & Ransomware Gangs – Cybercrime groups like Lazarus Group (North Korea-linked), Conti, or REvil could design a cryptocurrency where ransom payments can be secretly traced, ensuring their affiliates don’t steal from the main organization.

What Cryptocurrency Would They Use?

Most organized crime groups wouldn’t need to create their own cryptocurrency because they already exploit existing cryptos through dark web markets and mixers (like Tornado Cash or Wasabi Wallet). However, if they did, potential options include:

1. Custom Private Coin (A "MafiaCoin" or "YakuzaCoin")

   • A cartel, mafia, or yakuza group could develop its own private coin with tracking features allowing them to monitor all internal transactions.
   • It would function like a centralized loyalty system, where only approved members can transact, reducing law enforcement infiltration.

2. Modified Monero or Zcash

   • A crime syndicate might take Monero (XMR) or Zcash (ZEC) (both privacy-focused coins) and secretly modify the code to allow internal tracking while appearing anonymous to outsiders.
   • This would prevent members from running off with money while still avoiding mainstream financial surveillance.

3. Dark Web Altcoins (Like "Haven Protocol" or "Ghost")

   • Some privacy coins, like Haven Protocol (XHV) or Ghost (GHOST), have been marketed as the next evolution of dark web money.
   • A crime group could hijack one of these lesser-known cryptos and modify it for their own internal tracking and payments.

4. Stablecoin with a Criminal Twist

   • A crime group could launch its own stablecoin (pegged to a fiat currency like the dollar) but with built-in tracking for ensuring payments, enforcing penalties, and monitoring money flows.
   • This would operate like an internal banking system for a cartel, mafia, or syndicate.

Most Likely Scenario?

Instead of creating a new coin, crime organizations likely use a mix of:

• Bitcoin (BTC) with advanced laundering methods.
• Monero (XMR) and other privacy coins for untraceable transactions.
• Centralized stablecoins like Tether (USDT), which can still be used before converting to cash.

If a criminal syndicate were to create its own surveillance-enabled cryptocurrency, it would likely be a private blockchain for internal use, designed to track member transactions and prevent theft within the organization—similar to how corporations use private ledgers but with a criminal twist.

Could they get into the code of say, bitcoin without being detected? I get creating it, but to highjack it seems problematic.

Hijacking Bitcoin’s code without detection would be extremely difficult, if not impossible, due to its open-source nature and the vast number of independent developers and miners constantly reviewing and securing the network. However, there are a few ways criminal organizations—or even intelligence agencies—could try to manipulate Bitcoin or other cryptocurrencies without directly altering the core code.

Why Directly Modifying Bitcoin’s Code is Nearly Impossible

1. Open-Source & Decentralized – Bitcoin’s source code is publicly available on GitHub, and changes must go through rigorous peer review by thousands of developers worldwide.
2. Consensus Mechanism – Bitcoin operates on a decentralized proof-of-work (PoW) system, meaning no single entity can just push changes into the protocol without network-wide acceptance.
3. Full Node & Miner Resistance – Even if malicious code were introduced, the majority of the Bitcoin network (miners and full nodes) would need to adopt it, which is highly unlikely without detection.

Ways Criminals (or Intelligence Agencies) Could Still Manipulate Bitcoin Without Direct Code Changes

1. Controlling Mining Power ("51% Attack")

• If a criminal organization or state actor controlled more than 50% of Bitcoin’s mining power, they could rewrite transactions, double-spend coins, or censor transactions.
• However, Bitcoin’s mining network is so vast that pulling off a 51% attack would be incredibly expensive (requiring billions in hardware and electricity).
• Who could do this? A nation-state with massive resources, like China or the U.S., but not a typical criminal syndicate.

2. Compromising Exchanges & Wallets

• Instead of changing Bitcoin’s code, criminals could hack or infiltrate major crypto exchanges or wallet services.
• If a mafia or cybercrime group compromised a popular wallet app, they could insert tracking malware or steal private keys.
• Example: North Korean hackers (Lazarus Group) have stolen hundreds of millions from exchanges by infiltrating wallets rather than touching Bitcoin’s core code.

3. Creating a "Fake" Bitcoin (a Forked Version)

• A crime group could create a Bitcoin fork (like Bitcoin Cash or Bitcoin Gold) and secretly embed tracking mechanisms.
• They could then promote it on the dark web, encouraging illicit users to adopt it, all while secretly tracking transactions.
• Problem: Most people prefer mainstream Bitcoin, so adoption would be difficult.

4. Supply Chain Attacks (Compromising Bitcoin Developers or Software Updates)

• A criminal organization could target individual Bitcoin developers through hacking, bribery, or coercion.
• If they compromised a widely used Bitcoin wallet or software library, they could introduce tracking code without changing Bitcoin itself.
• Example: There have been past attempts to introduce backdoors into cryptographic libraries, but they were caught by security researchers.

5. Quantum Computing (Future Threat?)

• If an intelligence agency (or criminal group with access to high-end tech) developed a powerful quantum computer, they could potentially break Bitcoin’s encryption and track or steal funds.
• However, this is still theoretical, as Bitcoin is expected to upgrade its cryptography before quantum threats become real.

Most Likely Method for Criminals?

Since hijacking Bitcoin’s core code is nearly impossible, a criminal group would focus on weak points instead:
✅ Hacking exchanges and wallets to track users and steal funds.
✅ Tricking people into using a compromised version of Bitcoin (via a fake fork or malware-laced wallets).
✅ Using blockchain analysis (like Chainalysis) to track transactions and enforce loyalty within their organization.

Bottom Line

While a crime syndicate cannot secretly alter Bitcoin’s core code, they can still exploit human and technical weaknesses in the ecosystem to gain control, track transactions, and steal funds.

Compiled with the aid of ChatGPT