The United States has just revealed a seizure of over $2 million in Bitcoin said to be meant for financing terrorist organizations over social media. Coinciding with the case, the Justice Department issued a deterrent to those that seek to use cryptocurrencies as part of criminal operations.

The Justice Department assistant attorney general has warned that the US government, notably the IRS, has developed tools to track blockchain transactions and tie it to their source.

Today, the United States government revealed the results of a multi-agency sting, related to cryptocurrencies like Bitcoin being used to fund terrorist organizations.

Nearly $2 million in Bitcoin and “other cryptocurrencies” were seized from over 300 wallets suspected of ties to the case.

According to the report, a website and several Facebook Pages allegedly involved with the terrorist organizations were also seized. These sites and pages were used to raise funds that would directly be used to support evil organizations like Hamas, Al Qaeda and ISIS, John Demers, the assistant attorney general for the Justice Department’s National Security Division said.

Related Reading | Former DoJ Prosecutor Turned Crypto VC: Bitcoin Helped Fight Crime

“By raising cryptocurrency on social media, these terrorists tried to bring terrorist financing into the current age. But these actions show that law enforcement remains a step ahead of them,” Demers said on behalf of several agencies on a call with reporters.

But how were these highly coordinated agencies so easily able to stay, as Demers says, ” a step ahead?”

The assistant Justice Department AG claims that the United States government in partnership with the Internal Revenue Service has developed tools to track blockchain transactions back to the source user. Or so they say.

Proof, however, is provided with the fact that over 300 wallet addresses were somehow identified as being tied to the crimes. The US government also blacklisted these names, so that the individuals would have trouble trying to cash out cryptocurrencies on an exchange and send funds to their financial institution.

But the idea that the US government has tools to track blockchain transactions goes beyond criminal activity with motive. Crypto investors and traders that misreported tax withholdings may have some explaining to do soon if the IRS decides to put these tools to the test.

Related Reading | Wealth and Tax Advisor Says IRS May Be Targeting Bitcoin Traders, Not Investors

And they likely will. The IRS had been considering contracting Coinbase, Chainalysis, and other blockchain analysis firms, and have either since developed tools of their own or licensed some from any of these firms.

The IRS also this year added a question on US tax returns, specifically asking individuals if they hold virtual currencies like Bitcoin or other crypto. Those who check the box yes, could end up having their blockchain transactions looked into.

However, any crypto holders that check the box no, but did hold crypto, will have a lot more trouble on their hands, according to this latest discovery.

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