US Customs has also begun releasing the previously-sanctioned Chinese Bitcoin mining equipment, after months of regulatory review. Parallel to this, a hot debate about crypto regulation and the national security was taking place in Congress. Representative Sean Casten warned of crypto’s involvement in illegal finance while Representative Warren Davidson argued for financial privacy.
US Sanctions Darknet Market Operator
Behrouz Parsarad is an Iranian-based operator who operated the darknet market Nemesis. The United States also sanctioned his cryptocurrency addresses which recently benefitted from Bitcoin’s price fluctuation. US Office of Foreign Assets Control announced on 4 March that Parsarad founded Nemesis 2021 and used it to facilitate the sales of drugs, fake identification documents, hacking tools, and other illegal services to cybercriminals.
(US Department of The Treasury )
The sanctions prohibit US citizens from transacting with Parsarad, or companies in which he holds more than 50% of the shares. Chainalysis is a blockchain analytics company. According to them, sanctioned assets are 44 Bitcoin addresses and five Monero address that have received over $850,000 from July 2022 until March 2024. Parsarad’s total cryptocurrency volume is believed to be more than $1.6m, due in part to the price increase over time.
Parsarad sent more than $12,000 in crypto to darknet markets like ASAP Market Incognito Market and Next Generation. He also had indirect exposure to cryptocurrency mixing, a technique often used to conceal the source of illicit funds. OFAC reported that the Nemesis marketplace had 30,000 users, 1,000 sellers, before it was shut down by a US-German-Lithuanian law enforcement joint operation in March 2024. Money laundering tools were built into the platform, allowing criminals to transact with relative anonymity.
( Chainalysis)
OFAC reports that Parsarad, in addition to being a hub of cybercriminals and narcotics dealers, was also actively involved with laundering virtual currency for other illegal actors who operated on Nemesis. The authorities estimate that Parsarad amassed millions during the existence of Nemesis. He reportedly tried to restart his business despite law enforcement action.
Although darknet markets have been heavily targeted by Western law enforcement, they are still very active. TRM Labs 2025 Crypto Crime Report estimated that darknet marketplaces generated over $1.7 billion revenue in 2024. It was a small increase over the year before.
Darknet markets in Russian continue to be dominant, despite limited Russian enforcement. Western darknet markets are becoming more unstable. In January 2024, Dutch authorities linked the disappearance of Bohemia Market, and Cannabia Market to an ongoing investigation. Incognito Market collapsed in March under mysterious circumstances. Its administrator, “Pharoah”, allegedly tried to extort its users, before closing down the platform.
Darknet markets are resilient despite the efforts of enforcement and disruptions to operations in Western markets. New actors try constantly to fill the gap left by closed platforms.
US Customs releases Bitcoin Miners Seized by US Customs
US Customs and Border Protection has reportedly begun releasing crypto-mining equipment made in China after detainment for months at different ports of entry. Taras Kullyk, CEO at Synteq, said that thousands of units of crypto mining equipment were released following the seizure up to 10,000. Kulyk claimed that CBP officials intentionally created obstacles to the Bitcoin mining industry. Ethan Vera confirmed, as chief operating officer of Luxor Technology and the Chief Operating Officer at Luxor Technology that some shipments are being released but most remain held.
These delays were reported to be linked with a US Department of Commerce probe into Bitmain’s chip designer Sophgo. In October, chips from Sophgo found in Huawei’s AI processor were the catalyst for an investigation. Sophgo has denied any business relations with Huawei, which is under US sanctions. CBP did not affect ASICs made by other Chinese manufacturers despite these problems.
Several companies were financially strained by the long detention. In November, one firm reported that they had accumulated more than $200,000 of holding fees on 200 ASICs still waiting to be released. CBP reportedly acted at the US Federal Communications Commission Agency’s request, adding another level of scrutiny.
( Blockspace)
Release of the miner is part of Trump’s trade policy, which includes a tariff of 10% on Chinese imports. The trade policies of the administration with Canada and Mexico also proceed as planned. The industry was very concerned about the interruption in the shipments, given that China provides 98% of all the chips for crypto mining. Bitmain, the biggest manufacturer of the chips in question, expanded production to the US, hoping to avoid future delivery problems.
In terms of global Bitcoin mining, the United States continues to be a major player. Nearly 38% (or hashrate) of all Bitcoins originates from this country. Four of the world’s most profitable Bitcoin mining companies are based in America: MARA Holdings (Core Scientific), CleanSpark and Riot Platforms.
US lawmakers clash over crypto and national security
Sean Casten, a US representative who represents the state of California in Congress, expressed concern that crypto-friendly laws and regulations could pose a threat to national security. Casten said this during a hearing of the House Financial Services Committee on March 5, while discussing the “Taiwan Conflict Deterrence Act of 2020.”
Elon Musk and President Donald Trump were accused by him of weakening the anti-money laundering and financial surveillance laws. He also claimed that cryptocurrency regulations would make it almost impossible to track the source of money being transferred. All ransomware in the United States is funded with crypto. Casten criticized even his colleagues who advocated policies which will decrease oversight and facilitate illicit financial activity.
Casten
Casten was criticized by crypto-supporting Representative Warren Davidson for his comments. Davidson accused Casten advocating a surveillance-state and argued the US shouldn’t follow China in regulating financial transaction. He called on lawmakers to respect constitutional principles, rather than expanding government control of financial activities.
In the context of broader worries about digital privacy and government overreach, there was a debate on financial surveillance. Edward Snowden, a former NSA employee who worked in April 2024 warned the government that it was about to expand its internet control. Snowden cited changes to Section 702 in the Foreign Intelligence Surveillance Act and the vague definition of an “electronic communication surveillance provider” which, he said, could force people who work with service providers into acting as government agents. Snowden, who has been critical of centralized digital systems, called for the decentralization of digital powers, such as artificial intelligence, in November 2024.
David Holtzman echoed Snowden’s warnings when he spoke in December 2024. Holtzman said that AI-driven digital surveillance is a threat unprecedented to human rights and privacy. He also stated that the decentralization of control was the best way to combat the rising authoritarian digital controls.
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