Why UK Police Are Struggling To Fully Capture Crypto In Criminal Investigations

UK police forces have seized Bitcoin and other crypto worth over £300m during criminal investigations, but this may only represent a fraction of the illicit funds.

Over £322 million worth of crypto has been seized by UK police over the past five years, according to successful FOI requests.

Data obtained from successful Freedom of Information (FOI) requests by The new scientist reveals that police in the UK have seized bitcoin and other crypto worth almost a third of a billion pounds during criminal investigations.

FOI requests show that 12 of the UK’s 48 police forces have seized cryptocurrency in the last five years, totaling over £322m based on their value at the time of seizure – the actual amount may be superior due to 15 forces not responding, or refusing requests.

Bitcoin accounted for more than 99.9% of the value of cryptocurrencies seized in the UK, but small amounts of Ethereum, Dash, Monero and Zcash were also confiscated.

Over the past year, notable crypto raids completed in the UK have included an international money laundering scheme based in London. worth £180 millionand the $2.7 million worth of crypto seized of a Lincoln teenager convicted of “sophisticated cyber fraud”.

However, the amount of crypto seized by UK police may be only a small fraction of the illegal funds still untraceable across the country, with a lack of skills needed to fully seize heavily crypto wallets, as well as legislative hurdles, all proving to be significant obstacles.

The UK’s National Crime Agency would not say how much cryptocurrency it seized, and the organization, like intelligence agencies MI5 and GCHQ, is exempt from FOI legislation.

Infiltration of crypto wallets

Cryptocurrencies are protected by extremely strong encryption, which means that even if the police can discover a wallet, it would be impenetrable without an encryption key that suspects are unlikely to reveal.

Chief Detective Inspector Joseph Harrop of Greater Manchester Police’s Economic Crime Unit said adoption of crypto by criminals was surprisingly rapid, requiring forces to learn new skills to transact business and seize funds.

The strategy undertaken by Greater Manchester Police has been to recruit civilian staff with relevant technical experience in cryptocurrencies and train them to work with detectives.

“If we recover laptops, USB drives, they might have a level of encryption and, yes, it’s hard to break into,” Harrop said.

“As silly as it sounds, sometimes people leave gold nuggets or hard evidence where they could literally have the things we need written down on a piece of paper.”

Legal obstacles

While the UK Proceeds of Crime Act 2002 gives police the ability to seize funds if there is a suspicion that they have been derived from criminal activity, even if there is no Under sentencing, powers to seize non-cash assets such as cryptocurrencies are narrower in scope. .

Cases involving crypto currently require a conviction, although cryptocurrency funds are essentially used in place of cash.

“Police forces have made so much progress in digital investigations, but the final stage of confiscation is simply too difficult to review in many situations,” commented Jake MooreGlobal Cybersecurity Advisor at ESET.

“The key design of cryptocurrencies is to protect them from interception by anyone, be it a threat actor or law enforcement, and they were not intended to have a backdoor. for whatever reason. This naturally poses a problem for police forces who want to seize by the original procedures to which they are all accustomed with old-fashioned finances. In some cases, criminals can be locked up with no access to their funds only to see huge returns upon release from prison.

“Digital investigations are still in their infancy and need a lot more resources to improve the fight against this growing crime. Cybercriminals are very aware of the well-documented evasion tactics available, but policing is improving at a rate that will slowly catch up over time.

“Deploying better surveillance techniques on known suspects, increasing intelligence and improving the profiling of those suspected of involvement all contribute to building stronger evidence to recover and seize funds. However, the cost of this could potentially outweigh the recoverable amount in many cases.

Information age analysis

The difficulties that UK police forces are facing in fully seizing illegally obtained crypto assets shows that national legislation, as well as jurisdiction, has some catching up to do. Always with cryptocurrencies yet to be regulated in the United Kingdom, investors are not protected by consumer protection laws in the event of their accounts being hacked, which further complicates matters for the country’s police. A regulatory framework put in place could go a long way in ensuring better protection for crypto users, and with investments showing no signs of slowing down, this should be heavily considered by regulators.

A skills gap in the police force is a very similar story unfolding in other industries, as digital technologies generally continue to rapidly evolve. However, the approach taken by Greater Manchester Police to appoint civilians to help crack down on illegal crypto funds is a step in the right direction – hiring from a diverse pool of candidates is essential when it comes to It’s about keeping policing innovation in line with criminal activity, because of which likely leads to the generation of new ideas.

Mark M. Gagnon