It’s not a secret that British police officers have been seizing massive amounts of cryptocurrencies, but you might be surprised by just how much. After using Freedom of Information (FoI) requests, New Scientist uncovered that 12 out of 48 police enforcers in the United Kingdom had taken crypto assets worth £322 million during criminal investigations over the last five years.
This shocking statistic came after Chainalysis, a renowned blockchain analysis firm, warned that crimes related to cryptocurrency increased to a record high in 2021. Over the course of last year, illegal addresses received digital currencies worth $14 billion, which is an increase of 79% from 2020’s $7.8 billion.
Crypto-Related Crimes Keep Increasing
However, Chainalysis warned that these statistics aren’t revealing the complete story and that cryptocurrency usage continues to grow faster than ever before. Out of all the crypto assets tracked by Chainalysis, the overall crypto transaction volume increased to $15.8 trillion last year. This is a 567% increase from the transaction volume in 2020.
The firm said that given how more and more people have been adopting cryptocurrency and using it in their daily lives, it is no surprise that more cybercriminals are also using crypto. However, the biggest surprise is that the increase was only around 79%, which was slightly lower than the overall adoption percentage.
Sometimes, it just so happens that police officers stumble across cryptocurrencies by accident. For instance, back in May 2021, West Midlands police enforcers launched a raid at a location they thought was a cannabis farm taking a massive portion of electricity. However, they were surprised to find a bitcoin mining operation instead and not the farm they expected.
On the other hand, New Scientist’s data noted that although the British police seized crypto assets valued at nearly 1/3 of a billion pounds during criminal investigations over the last five years, this figure may be only a tiny fraction of the illegal funds used in the UK. The primary reason for this is that the UK police undergo technological and legislative obstacles regarding crypto-related investigations.
According to the New Scientist, the actual figure may be significantly higher than the reported seized amount because 15 officers didn’t respond to some requests. 99.9% of the seized cryptocurrencies were Bitcoin, but there were traces of other assets, including Ethereum, Dash, Monero, and Zcash.
Recruiting Civilian Staff
Joseph Harrop, the detective chief inspector of Greater Manchester Police’s economic crime unit, said that criminals adopting cryptocurrencies for their illegal activities came much faster than expected. Now, their teams are working hard to gain new skills to help them deal with cases and seize more illicit crypto funds.
Harrop’s strategy is to recruit the help of civilian staff, specifically those who have relevant technical experience in cryptocurrencies. Then, they will be trained to work alongside detectives. One of the main issues that the British police have is that even if they uncover a suspected wallet or address, they still have to deal with some legal hurdles to acquire the funds inside. In other words, they can’t seize these funds as fast as they’d like.
According to the UK’s Proceeds of Crime Act 2002, police enforcers can take funds even without conviction as long as there’s suspicion that those funds were from criminal activities. However, it’s not as simple for non-cash properties like crypto. The requirements are much narrower in scope and must first require a conviction before seizure even though crypto is essentially used like cash.
Unfortunately, their troubles don’t end there. Perhaps the biggest issue that the UK police face, and possibly all the law enforcers worldwide, is that cryptocurrencies are typically protected by incredibly strong encryption. In other words, even if they discover a suspicious or convicted wallet, they still won’t be able to access the funds without an encryption key. And it’s improbable that the suspect will reveal that vital information to the police.
Harrop admits that there’s some level of difficulty involved in trying to get through the encryption whenever they find a USB, laptop, or any other similar device. However, some people tend to write things down for memory’s sake, and that’s how the police gain access to crypto funds. “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,” said Harrop.