Changing an intelligence agency's perspective on crypto crimes could be the next step toward an investigation that is successful.


While the value of cryptocurrencies has fluctuated dramatically over the last year, this hasn't diminished the appeal of crypto to criminals. Many are moving their criminal activities underground and away from the sight of law enforcement. Because of the open nature of the majority of blockchains, but this quick movement isn't a big concern to law enforcement agencies. With the right tools and instruction, following the proceeds of crypto-enabled crime isn't as hard as it may seem.


However, intelligence agencies must be equipped with a crypto investigation plan that has the proper tools for lawfully collecting digital evidence, as well as the educated personnel to look into these types of crimes whenever they are discovered.


Digital Intelligence (DI) is a two-part definition -- the data gathered from digital sources as well as data types (think smartphones computer systems, laptops, and cloud) as well as the method agencies utilize, manage and gain insights from this data to effectively run investigations. For law enforcement to investigate security-related crypto-related incidents, they must have the right tools and experience to drive these investigations forward. When investigators know what they're looking to find, and have the right tools and know-how to follow and analyze those indications, crypto will appear less like an "invisible" web and more like the DI operations that detective teams employ to.


According to a report on the enforcement of cryptocurrency from the United States Attorney General's Cyber-Digital Task Force within the Department of Justice, crypto-based criminals fall into three categories:


1. Utilizing cryptocurrency as a means to finance criminal acts


Bitcoin (BTC) was pushed into the global media because of a string of prominent, international criminal trials linked to the darknet in 2013. In 2013, Bitcoin was the sole form of currency on the dark web. After several successful government seizures, anti-regulatory computer developers created Monero (XMR), Dash, Zcash (ZEC) and other privacy-related coins to obfuscate the public ledger, which hinders authorities to track and confiscate assets.


Legal businesses generally do not make use of the darknet to market products and services, however that does not mean genuine products cannot be found on the darknet. Products that have been stolen, counterfeit items as well as copied software with stolen activation keys are easily found with steep discounts.


Business owners also face the threat of data theft. Selling employee records, bank accounts, customer records and proprietary information is one of the most lucrative methods criminals use to earn money from the darknet. In the year 2019, the cybersecurity firm CipherTrace found it was 66% of the products and services provided by darknet vendors in the course of the year were derived from the stolen payment products of financial institutions that had been compromised.


The easiest and fastest way to find these criminals is by using sophisticated crypto trackers and analytics programs.


2. Financial fraud and money laundering activity


When criminals make money through illicit activities like the sale of drugs, fraud human trafficking or the trafficking of weapons and human trafficking, they require a method to turn the illicit money so that they appear legitimate. This process is known as "money laundering."


Because of its ease of use and pseudo-anonymity, crypto-money laundering is quickly becoming a major method of transfer and laundering of money. In just a few minutes cryptocurrency can be transferred across borders, converted into any other cryptocurrency , or traded for actual assets.


3. Crimes involving crypto and crypto


Certain criminals who are involved in crypto choose to concentrate their efforts on crypto customers and trading platforms.


In 2018 three North Korean military hackers -arrested in Feb 2021 successfully obtained and stole more than $1.3 billion of fiat and cryptocurrency from banks and businesses. As 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, nearly $1.5 billion went missing 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 crimes continue to increase quarter-over-quarter.


These types of investigations pose many problems for both private and public sectors. The technology behind the cryptocurrency system is complex and is rapidly changing. As a result, police agencies are struggling just to keep up to date with the latest security patches as well as the necessary equipment to effectively solve cases.


Clearly, the use of crypto is not just an unavoidable trend as the demand for cryptocurrency has dramatically been growing. Law enforcement agencies may be looking for specific crypto wallets or addresses, which can lead to the identification of an individual who is responsible for the transactions. Digital intelligence advancements provide investigators with the capability to see transactions as well as follow the trail of paper that could identify evidence regarding individuals who commit crimes.


Training and education is the essential


One of the primary problems for law enforcement officers when confronting cryptocurrency is the perception. Cryptocurrency is still in its early stages and changing which is why people see it as a complex subject so the need for education and training is crucial. Investigators and agents must have the skills required to enhance practices and techniques, but it could be difficult for police commanders to see the importance of training in cryptocurrency because the types of investigations that are available are relatively new to law enforcement.


Agencies were faced with the same problem at the time of the war, when top management didn't believe that investigating cell phones was essential. A lot of teams did not investigate mobile devices because they were not equipped with the necessary tools and knowledge to conduct properly with the data collected from mobile phones. Today, almost every crime is linked to a mobile phone. In the near future, virtually any financial offense will bear a relationship to crypto, because crypto is the inevitable future of money.

New investigative tools


The next tier comprises investigative tools. These are physical tools used to collect data from devices as well as software to analyze the information gathered. To develop the most effective tools for crypto researchers, teams need solutions built around a complete blockchain search engine software that collects huge amounts of data points that can be used to track crypto addresses in exchanges, dark market, and crypto ATMs.


New solutions entering the market give teams the ability to collect cryptocurrency artifacts and be used as "leads" to start a blockchain investigation.


Technology advancements in cryptocurrency have brought experienced criminals underground, where law enforcement involvement is almost non-existent, and the chances of being captured are very low. Law enforcement should prepare now to create a complete end-to-end investigative system that is focused on understanding tools, tools and services. Digital intelligence is key in finding out the cause of the incident and planning for the next event, and it is imperative you ensure all DI strategies include contingencies that are supported by world market Darknet-class tools specifically designed for crypto.


With the growing use and popularity of cryptocurrencies the agencies should be looking to bring their DI knowledge in-house, and also enlisting savvy experts. This is a two-part approach -agencies need expertise and the appropriate tools to effectively respond to the occurrences that involve crypto. These are the fundamental elements of a robust DI strategy. Crypto has been traced back to various types of crimes -- from financial fraud to wildlife, drug and human trafficking making it a fundamental component of DI investigations. And while becoming the new kind of currency cryptocurrency, the technology behind it will aid in easing the investigation processes.


To tackle these challenges, it is necessary to the advancement in law enforcement equipment, education and strategies based around DI and analytics of data. The conclusion is that cryptocurrency will be around for the long haul, so law enforcement officials should take the necessary steps today to be prepared for the rise in cybercrimes that are sure to become more widespread because of the rising popularity of cryptocurrency. Cryptocurrency is not an instrument for criminals, since money has always been. However, it is an instrument used by law enforcement agencies as well.