Data obtained from successful freedom of information (FOI) requests by The New Scientist reveals that police across the UK have seized Bitcoin and other crypto valued at 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 past five years, totalling more than £322 million according to their value at the time of seizure — the true amount may be more due to 15 forces not responding, or refusing the requests.
Bitcoin represented over 99.9% of the value of seized cryptocurrencies in the UK, but small amounts of Ethereum, Dash, Monero and Zcash were also confiscated.
In the past year, notable completed crypto raids in the UK have included an international money laundering scheme based in London worth £180 million, and the seizing of $2.7 million’s worth of crypto from a Lincoln teenager convicted of “sophisticated cyber fraud”.
However, the amount of crypto seized by UK police may only be a small fraction of the illegal funds still unfound across the country, with a lack of skills necessary to fully seize strongly encrypted wallets, along with legislative hurdles, all proving prominent obstacles.
The UK’s National Crime Agency wouldn’t say how much cryptocurrency it has seized, and the organisation, like intelligence agencies MI5 and GCHQ, is exempt from FOI legislation.
Infiltrating encrypted wallets
Cryptocurrencies are protected by extremely strong encryption, meaning that while police may discover a wallet, it would be impenetrable without an encryption key that suspects are unlikely to reveal.
Detective chief inspector Joseph Harrop of the economic crime unit at Greater Manchester Police said that adoption of crypto by criminals was unexpectedly fast, resulting in forces scrambling to gain new skills to deal with cases and seize funds.
The strategy being undertaken at 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 sticks, they might have a level of encryption on and, yes, there’s a difficulty in getting inside it,” said Harrop
“As daft as it sounds, sometimes people do leave golden nuggets or strong evidence where they might literally have the stuff that we need written down on a piece of paper.”
Legal hurdles
While the UK’s Proceeds of Crime Act 2002 gives police the ability to seize funds if there is a suspicion that it was gained from criminal activity, even if there has been no conviction, powers to seize non-cash property such as cryptocurrencies are narrower in scope.
Cases involving crypto currently require a conviction, despite cryptocurrency funds essentially being used as in place of cash.
“Police forces have come so far in digital investigations yet the final step of confiscation is simply too difficult to examine in many situations,” commented Jake Moore, global cybersecurity advisor at ESET.
“The key design of cryptocurrencies is to keep them secure from interception from anyone, whether that be a threat actor or law enforcement plus they were not intended to have a back door for any reason. This naturally causes a problem for police forces wanting to seize through the original procedures they are all used to with old fashioned finances. In some cases, criminals may be locked up without giving away access to their funds only to see huge returns on their release from jail.
“Digital investigations still remain in their infant phase and require far more resources to improve fighting this growing criminality. Cyber criminals are very aware of the well documented evasion tactics available but policing is improving at a rate that will slowly catch up in time.
“Deploying better surveillance techniques on known suspects, increasing intelligence and improving the profiling on those who are thought to be involved all helps build stronger evidence to recover and seize funds. However, the cost of this could potentially outweigh the amount that is recoverable in many cases.”
Information Age analysis
The struggles that UK police forces are facing in fully seizing illegally obtained crypto assets show that national legislation, as well as skill sets, have catching up to do. With cryptocurrencies still yet to be regulated in the UK, investors aren’t protected by consumer protection laws in the event their accounts are hacked, which complicates matters further for police in the country. A regulation framework being put in place could go a long way in ensuring better protection for crypto users, and with investment showing no signs of slowing down, this should be strongly considered by regulatory bodies.
A skills gap in the police force is a story that is playing out very similarly in other industries, as digital technologies generally continue to quickly 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 vital when it comes to policing staying innovative in line with criminal activities, due to this likely leading to generation of new ideas.
