A shift in an intelligence agency’s view on crypto crimes could be the next step towards an investigation that is successful.
Although the price of cryptocurrency has fluctuated greatly over the last year, this has not affected the value of cryptocurrency to criminals. A lot of them are moving their illegal activities underground and out of the reach from law enforcement. Because of the public nature of most blockchains, but this quick movement shouldn’t be a major concern for law enforcement agencies. With the right tools and training tracking the proceeds of crimes that are fueled by crypto is not as difficult as it seems.
However, intelligence organizations must have a plan for investigating cryptocurrency that has the proper devices to collect legal digital evidence and the properly qualified personnel to investigate the occurrence of these kinds of crimes. they arise.
Digital Intelligence (DI) is a two-part definition — the data that is gathered from digital sources and different types of data (think smartphones computer systems, laptops, and cloud), and the manner agencies utilize, manage and obtain information from the data in order to conduct investigations effectively. For law enforcement to investigate crypto-related security incidents, it must have the appropriate tools and know-how to drive these investigations forward. When the investigators understand what they’re looking for, and have the right tools and know-how to study and follow indications, crypto will appear less like an “invisible” web and more like the DI investigations that the investigative teams use to.
According to a report on cryptocurrency enforcement of the United States Attorney General’s Cyber-Digital Task Force within the Department of Justice, crypto-based crimes fall into three categories:
1. Making use of cryptocurrency to fund criminal acts
Bitcoin (BTC) has been pushed into the global media because of a number of significant, international criminal investigations that were linked to the darknet during 2013. At the time, Bitcoin was the only kind of currency that was available on the dark web. After a series of successful government seizure, anti-regulatory computer developers created Monero (XMR), Dash, Zcash (ZEC) and other privacy coins designed to obscure the public ledger. This makes it difficult for police to trace and seize assets.
Legitimate businesses typically do not make use of the darknet to market goods and services, but that does not mean legitimate goods are not offered on the darknet. Products that have been stolen, counterfeit items and copies of software that have stolen activation keys are easily discovered and are sold at a steep discount.
Companies also have the threat of losing information. Selling the bank accounts of employees, employee records as well as customer records and confidential data is among the most lucrative ways that criminals earn money from the darknet. In 2019, cryptocurrency intelligence firm CipherTrace found an average of 66% the products and services offered by darknet vendors throughout the year came from stolen payment products from financial institutions that have been compromised.
The quickest and easiest way to find these criminals is through sophisticated crypto trackers as well as analytics programs.
2. The financial industry is a target for money laundering and concealing activity
When criminals make money through illicit activities like the sale of drugs, fraud human trafficking, or weapons trafficking it is necessary for them to find a way to transform the illegal funds to make them appear legitimate. This process is called “money laundering.”
Due to its ease of use and its pseudo-anonymity, the use of crypto-money is fast becoming a significant method for transfer and laundering of money. In just a few seconds, cryptocurrency can be transferred transnationally, converted into any other cryptocurrency or traded for real assets.
3. Criminality involving crypto on crypto
Certain criminals in the crypto world choose to concentrate their efforts on crypto traders and users.
In 2018 Three North Korean military hackers -arrested in the month of February in 2021 stolen and extorted more $1.3 billion of fiat and cryptocurrency from banks and companies. As the Assistant Attorney General John Demers said:
“North Korea’s operatives, using keyboards rather than masks and guns, are the world Market url‘s leading 21st-century nation-state bank robbers.”
In 2020, around $1.5 billion of the money was lost due to of fraud and misappropriation, according to CipherTrace’s “2020 Cryptocurrency Crime and Anti-Money Laundering Report.” The DeFi-related criminality is only increasing quarter over quarter.
Investigations of this kind pose many challenges for both the government and private businesses. The technology behind the cryptocurrency system is complex and is rapidly changing. As a result, police agencies struggle to keep up to date with the latest security patches and the required equipment to effectively solve cases.
It is evident that the use of crypto is not just a passing trend, as the demand for cryptocurrency has dramatically grown. The law enforcement authorities may be tracking certain crypto wallets , or addresses, which may result in pinpointing those responsible for the transactions. Digital intelligence advancements allow investigators the capability to see transactions as well as follow digital paper trails that could reveal evidence about people who are involved in criminal acts.
The importance of education and training is most important aspect.
One of the first challenges for law enforcement agencies when dealing with crypto is the perception. The field of cryptocurrency is constantly evolving and new, so people perceive it as complex, which means that training and education are critical. Investigators and agencies must have the required skills to improve strategies and methods, however, it could be difficult for police command staff to see the importance of training in cryptocurrency because these kinds of investigations are new to law enforcement.
Agencies had to overcome the same obstacle at the time of the war, when command staff did not think that investigations into cell phones were crucial. A lot of teams did not investigate mobile devices due to the lack of the right tools and skills to perform proper cell phone data analysis. In the present, almost every crime has some relation to a mobile phone. In the near future, almost each financial crime is likely to have some connection to cryptocurrency, since cryptocurrency is the future of money.
New investigative tools
The third tier is made up of investigative tools. They are tools that use physical components to collect data from devices as well as software utilized to analyze the collected data. In order to create the most effective tools for crypto-investigators teams require solutions built around a broad blockchain search engine that gathers massive amounts of data points that can be used to track the cryptocurrency addresses of exchanges, dark markets and ATMs that accept crypto.
The new solutions that are on the market offer teams the capability to surface cryptocurrency artifacts to serve in the role of “leads” to start a blockchain investigation.
The development of cryptocurrency technology has pushed experienced criminals underground which means that law enforcement involvement is practically nonexistent and the chance of being found are low. Law enforcement agencies should be prepared now to develop a comprehensive end-to-end investigation solution that is based on knowledge tools, tools and services. Digital intelligence is crucial to determining the causes of an incident and in preparing for the next incident, and it’s essential that all DI strategies have contingencies supported with top-of-the-line software specifically developed for crypto.
Due to the increased use and popularity of cryptocurrencies organizations should also be aiming to bring their DI knowledge in-house, and also enlisting skilled experts. It’s a two-part strategy -agencies need expertise and the right tools to be able to appropriately respond to crypto-related incidents. These are the fundamental elements to build a robust DI strategy. Crypto has been traced back to numerous types of crimes — from financial fraud to animal, drug and human trafficking making it a crucial element in DI investigations. And while becoming the new type of currency cryptocurrency, the technology behind it will help ease the investigative procedures.
To tackle these challenges, it is necessary to the development in law enforcement equipment, education and strategies that are based on DI and data analytics. The most important thing to remember is that crypto will not go away, and law enforcement agencies need to adopt the appropriate steps now to be ready to deal with the escalating number of crypto crimes that is sure to increase in frequency as the popularity grows of cryptocurrencies. But crypto is just the tool of criminals just as money has always been. But it has to be a tool for law enforcement agencies as well.
