The N8 Policing Research Partnership, in early August, published a report that called for an increased law enforcement involvement in bitcoin seizures. The research group, hereinafter “N8,” proposed that UK police needed cryptocurrency training for several reasons. The most significant, they explained, involved the role Bitcoin had on modern criminal activity. According to their report, Bitcoin had become the most popular cryptocurrency among criminals.
The report insightfully explained that Bitcoin had become one of the most common method of exchange for crimes involving ransomware or illegal darknet activity. The report failed to clarify whether or not other cryptocurrencies were favored for legal darknet purchases. These currencies—bitcoin & monero received special notices—have been enabling “criminal transactions and crimes such as money laundering, extortion, (ransomware), blackmail, and fraud,” the report explained.
Various scenarios were analyzed before N8 came to conclusions regarding the currency. The report consisted of two types of research. One involved these “scenarios” and the other involved an examination of potential criminal uses of any modern cryptocurrency. One scenario, for instance, included an “actual forensic examination of criminal activity” and “sample purchases of criminal goods from the dark web.”
Said scenario was aptly titled “Dark Web Purchases” and, as explained, involved sample purchases from a fictitious darknet marketplace with the added touch of a mock warrant. “As part of this research, dark web marketplaces were accessed and a number of goods were purchased using crypto-currencies bitcoin & monero,” the report explained. “A mock warrant was executed and devices seized; Dr Syed Naqvi of Birmingham City University then conducted digital forensic examinations to identify bitcoin activity.”
Another area of the report highlighted the dynamic between law enforcement officers, ordinary cash seizures, and Bitcoin seizures. According to the group’s research, officers are less likely to identify “Bitcoin activity” than notice and seize cash in an ordinary drug bust. Police in the UK apparently know what physical cash is, but this is not the case with Bitcoin. N8 wants this to change. One approach is through a four page “booklet” on Bitcoin titled, “Booklet Designed To Help Officers To Identify Bitcoin Activity.”
The booklet was justified due to the following, N8 wrote:
“Officers regularly seize cash from criminals utilising POCA and PACE legislation however the seizure of bitcoin remains a rarity and this is anecdotally, due to officers not knowing A., what bitcoin is, and B., what to look for.”
“Subsequently Phil Larratt and Paul Taylor from GMP have produced a four page booklet designed to help officers to identify bitcoin activity.”
And finally, the report suggested—rather recommended—a four tier training program to increase law enforcement’s ability to identify cryptocurrency.
Tier 1 – Bitcoin experts:
Summarized in the Tier title itself. This tier calls for formalized expert witnesses.
Tier 2 – National/Regional Cyber-Crime Units:
Officers of Cybercrime units need to be capable of analyzing Bitcoin transactions. They need access to private industry software. And they need the skill to conduct investigations.
Tier 3 – Digital Media Investigator network: DMIs would be required to use open source tools “to identify and track bitcoin activity.”
Tier 4 – Frontline officers and investigators:
This calls for a mandatory “I know what Bitcoin is” course for all UK police. The course would focus on the indemnification of Bitcoin and how to contact the concerned authorities.