Changes in the perception of intelligence agencies regarding crypto-related crimes will be the first step in a successful crypto investigation.
While the value of cryptocurrencies has fluctuated wildly over the last year, this does not mean that it is less attractive to criminals. A lot of them are moving their illegal activities underground and away from the eyes of law enforcement. Because of the public nature of the majority of blockchains the rapid growth should not be of concern to law enforcement agencies. With the right tools and knowledge tracking the proceeds of crimes that are fueled by crypto is actually not as difficult as it seems.
However, intelligence agencies should be equipped with a crypto investigation plan that is equipped with the right tools to lawfully collect digital evidence and properly equipped personnel to conduct investigations into the occurrence of these kinds of crimes. they are discovered.
Digital Intelligence (DI) is the result of two components: the data collected from digital sources and data types (think smartphones computers, computers, and the cloud) and the way agencies can access to, manage, and get information from the data in order to effectively run investigations. For law enforcement to investigate security related to crypto, it should be equipped with the proper tools and expertise to move these investigations forward. If investigators are aware of what they’re looking for and are equipped with the proper tools and skills to analyze and follow those signals, crypto can appear more like an “invisible” web and more like the DI investigations that the investigative teams use to.
According to an investigation into the enforcement of cryptocurrency by the United States Attorney General’s Cyber-Digital Task Force within the Department of Justice, crypto-based criminals fall into three categories:
1. The use of cryptocurrency as a way to pay for crimes
Bitcoin (BTC) became brought into the world media because of a number of significant, international criminal investigations related to the darknet back in 2013. In 2013, Bitcoin was the sole form of currency available on the dark web. After several successful government seizures computer hackers created Monero (XMR), Dash, Zcash (ZEC) and other privacy coins designed to obfuscate the public ledger, which makes it more difficult for law enforcement to track and take assets.
Businesses that are legitimate typically don’t use the darknet to sell goods or services, but this doesn’t mean that the products aren’t available in the darknet. Stolen goods, counterfeit products and copies of software that have stolen activation keys can be located with massive discounts.
Businesses also face the risk of losing information. Selling bank accounts, employee records data, customer records, and other confidential data is among the most lucrative ways that criminals make money on the darknet. In 2019, cybersecurity firm CipherTrace discovered the majority of products and services offered by darknet vendors during the year were derived from stolen payment products of financial institutions that were compromised.
The most efficient and fastest method to find these criminals is to use advanced crypto trackers and analytics programs.
2. Financial fraud and money laundering business
Criminals earn money through unlawful activities like the sale of drugs, fraud human trafficking or the trafficking of weapons They require a means to convert the illicit funds so that they appear legitimate. This is known as “money laundering.”
Due to its ease of use and pseudo-anonymity, crypto-money laundering is quickly becoming a major method of transfer and laundering of money. Within minutes, crypto-currency can be moved across the world or converted into another cryptocurrency or traded in exchange for real assets.
3. Criminality involving crypto on crypto
Certain criminals who are involved in crypto choose to focus their efforts on cryptocurrency consumers and exchanges.
In 2018 Three North Korean military hackers -arrested in January 2021 successfully stolen and extorted more $1.3 billion of fiat currency and cryptocurrency from banks as well as companies. As the Assistant Attorney General John Demers said:
“North Korea’s operatives, using keyboards rather than masks and guns, are the world’s leading 21st-century nation-state bank robbers.”
In 2020, around $1.5 billion in value was lost as a result of fraud and misappropriation, According to the report of CipherTrace’s “2020 Cryptocurrency Crime and Anti-Money Laundering Report.” The DeFi-related crime only continues to rise quarter over quarter.
These kinds of investigations create many challenges for both the private and public sectors. The technology behind the cryptocurrency market is complex and fast-changing. So, it is no surprise that police agencies have a difficult time keeping up to date with the latest security patches and hardware in order to efficiently solve cases.
It is evident that the use of crypto is not just an overnight phenomenon, since the interest in cryptocurrency has drastically increased. Law enforcement may be tracking certain crypto wallets or addresses, which could lead to the identification of an individual who is responsible for the transactions. New developments in digital intelligence give the investigative teams the ability to visualize transactions and trace virtual paper trails that can identify evidence regarding individuals who commit criminal acts.
Education and training is the crucial
One of the primary difficulties for law enforcement when dealing with crypto is perception. Cryptocurrency is still in its early stages and changing, so people perceive it as complicated and therefore, training and education are critical. Investigators and agencies must have the right skills to maximize strategies and methods, however, it may be difficult for police command staff to appreciate the value of cryptocurrency-related training since the types of investigations that are available are not new to law enforcement.
Agencies had to overcome the same obstacle in the past decade, when command staff did not feel cell phone investigations were crucial. There were many teams that did not pursue mobile devices due to the lack of the tools and training necessary for proper cell phone data analysis. Today, almost every crime has some relation to a cell phone. In the near future, virtually all financial crimes will be linked to a relationship to crypto, because cryptocurrency is the future of money.
New investigative tools
The second layer is comprised of investigative tools. They are tools that use physical components to gather data from devices as well as software utilized to analyze the collected data. To develop the most effective tools for crypto analysts, teams need solutions built around a full blockchain search engine that gathers massive amounts of data points to track the addresses of cryptocurrency through exchanges, dark market, and ATMs that accept crypto.
The new solutions that are on the market give teams the ability to discover cryptocurrency artifacts in order to act for “leads” to start a blockchain study.
Technology advancements in cryptocurrency have pushed experienced criminals underground which means that law enforcement involvement is minimal, and the likelihood of being caught are minimal. Law enforcement must now prepare to design a complete, end-to-end investigative strategy that focuses on information, tools and services. Digital intelligence is essential to determining what went wrong and then preparing for the next incident and it is imperative that all DI strategies are backed by World Market Onion-class tools specifically designed for crypto.
With the growth in use and popularity of cryptocurrencies, agencies should also be looking to bring their DI expertise into the company and bringing in knowledgeable experts. It’s a dual-step solutionagencies require both knowledge and the appropriate equipment to respond appropriately to the occurrences that involve crypto. These are the foundational elements to build a robust DI strategy. Crypto can be traced back to different kinds of crimes, from financial fraud to drug, wildlife and human trafficking making it a fundamental element of DI investigations. And while becoming the new method of payment the technology behind cryptocurrency can help speed up the investigation procedures.
In order to tackle these new challenges, you need the advancement in law enforcement equipment, education, and strategies based on DI as well as data analysis. The final word is that the cryptocurrency is here to stay police and other law enforcement organizations must take the necessary steps today to be ready for the rise in cryptocurrency-related crimes that are bound to grow more commonplace with the increasing popularity of cryptocurrencies. But crypto is just the tool of criminals since money has always been. However, it is an instrument for law enforcement agencies as well.