Tampa, a resort city in Florida, has recorded what is thought to be the first crime committed there with popular digital currency bitcoin, as regulators across the globe worry that criminals are increasingly making use of new technologies to avoid law enforcement.
Daniel Brian Springer III from Tampa was charged with purchasing the illegal drug Ecstasy from China, using an underground website named Black Market Reloaded and bitcoins worth more than $2,000 (£1,216, €1,483).
The US Drug Enforcement Administration intercepted the package of the drug from China in July. The culprit hoped to make money by selling the drug, according to court documents.
His father, Daniel Brian Springer II, was also charged with helping arrange the address where the package would be sent. Both of them pleaded guilty to a federal drug conspiracy charge.
Rising Number of Bitcoin Crimes
"I believe we will be seeing more and more criminal cases in which the offenders will be using bitcoin to commit the crime," the Tampa Tribune quoted acting US attorney Lee Bentley as saying.
"There are now public examples of virtual currency being used by nearly every type of criminal imaginable," Justice Department official Mythili Raman told a US Senate committee in November.
"Early users of virtual currency also included criminals involved in the trafficking of child pornography, credit card fraud, identity theft, and high-yield investment schemes."
Earlier in January, Charlie Shrem, the CEO of bitcoin exchange BitInstant, was arrested and charged with money laundering and using bitcoins to purchase drugs on the Silk Road website.
The notorious online black market Silk Road had had some 30,000 bitcoins seized by the US prosecutors after the website was found to be facilitating money laundering using the virtual currency.
Criminals are increasingly using new technologies as they are looking for ways to securely infringe on laws.
"Criminals are nearly always early adopters of new technologies and financial systems, and virtual currency is no exception," Tampa FBI spokesman Dave Couvertier told the newspaper.
"Locally, we're starting to see activity that's involving our area as people become aware of this particular virtual currency and some of the benefits of being anonymous."
Bitcoin was launched in 2008 and is traded within a global network of computers. They can be transferred without going through banks or clearing houses, reducing fees involved in the services significantly.
The seizing of Silk Road and the arrest of Shrem were major setbacks to bitcoin's reputation, as its anonymity has been a serious concern for regulators. Transactions in bitcoins are done anonymously over peer-to-peer networks.
Critics say bitcoins could be used for drug transactions, money-laundering and other illegal activities due to the near anonymity of those who deal in it.
The digital currency's value plummeted to as low as $640 after China's central bank barred the country's banks and third-party payment processors from dealing in bitcoin.
In addition to China, regulators in the US, Europe, Russia and India warned consumers about the risks of virtual currencies in light of the currency's growing popularity and usage.