Blockchain technology poses unique threats to law enforcement organizations. This new technology allows anyone to transfer funds internationally, and in many cases anonymously. Criminals also recognize this ability and continue finding new ways to integrate these features into their illegal activities. While the news often sheds light on the nefarious actions of crypto users, it’s also important to understand how this technology creates a unique opportunity for blockchain law enforcement strategies to develop.
In the early days of crypto, many people believed Bitcoin to be untraceable and anonymous. Crypto investors now know that this isn’t the case. Today, multiple blockchain tracking platforms exist in the market. These platforms, such as Chainalysis, provide anyone with the means to research transactions on the blockchain.
Blockchain tracking platforms help individuals and organizations better monitor the activity on the blockchain in real-time. These tools are helpful in tracking unusual transactions, but because of their civilian-based nature, they’re unable to unmask the identity of the owner of a particular crypto-wallet.
This desire for more blockchain information led to the development of a number of blockchain law enforcement strategies. Unlike their predecessors, these platforms seek to provide law enforcement with added functionality. Below are a few of the most important platforms to watch.
The popular cryptocurrency platform Bitfury launched their Crystal system in January of this year. Crystal is an all-in-one Bitcoin blockchain analysis tool specifically designed for use by law enforcement organizations. The program provides a blockchain law enforcement system that includes advanced data mapping and grouping technology.
Crystal monitors Bitcoin’s blockchain in real time. This information gets sorted and grouped based on its transactional data. The program enables law enforcement to see nefarious or suspicious transactions between multiple Bitcoin accounts. The firm boasts that their product can identify and track criminal activity on the blockchain with high accuracy.
The system enables the grouping of information regarding a specific entity. In the blockchain community, this information can be difficult to ascertain. This scenario happens when an individual utilizes multiple wallets to send transactions. Crystal recognizes these patterns and automatically forms a user identity based on the activity.
Bitfury wanted an easy-to-use system that featured a user-friendly interface. Additionally, the system grants each transaction with a detailed risk score. These scores provide investigators with a means of rating the validity of a transaction. The system provides this information by monitoring thousands of suspicious Bitcoin addresses.
For example, law enforcement receives a notification when sent funds go to, say, an address associated with the dark web. The system also untangles the data, which reveals when fund distribution spans several entities.
The Canadian-based firm Leonovus recently unveiled its latest law enforcement tool: the Blockchain Evidence Locker. In the face of growing demand for digital evidence storage, Leonovus believes they have the solution.
Today, law enforcement agencies find themselves in a unique scenario: a vast majority of evidence is digital. This digital evidence requires secure storage methods. Everything from confiscated computer evidence, all the way to body cam footage, needs to be stored in an unaltered state. The current method of storing this data leaves much to be desired as law officials have no way of verifying that the evidence has not been viewed, altered, or tampered with during the interim period between arrest and trial.
Leonovus’ Blockchain Evidence Locker uniquely accomplishes this task. The platform utilizes a blockchain to distribute the information in a secure and easily accessible manner. The transparent nature of the system prevents any intruders from altering the evidence. Additionally, the system timestamps all evidence with who viewed the information and when they did.
The current system requires law enforcement officials to maintain a detailed chain of custody for all digital evidence. Currently, this process consumes large amounts of resources. The Blockchain Evidence Locker automates this process through the use of smart contract technology. Another great feature Leonovus included is the ability of auditors to view and verify the gathered data in real-time.
The Blockchain Evidence Locker has numerous law enforcement agencies showing interest in the platform. The company announced a pay-based trial this month, and already, some law enforcement agencies around the globe have registered.
In addition to software solutions, law enforcement agencies continue gathering their resources to combat the new threats faced globally. Multiple blockchain-based law enforcement groups share information. The Blockchain Alliance currently shows over 50 registered members, many of whom comprise these groups.
The platform entered the scene in October of last year, following some high profile crypto cases. The firm states that it is a resource for the blockchain community to understand the interests and concerns of government agencies. The alliance looks to educate law enforcement agencies on how to best tackle the rising use of cryptocurrencies in global criminal activity.
The developers of this blockchain law enforcement platform believe that educating law enforcement officials directly is the first step to alleviating their fear and anxiety surrounding the new technology. Today, the platform provides an open and useful dialogue between industry professionals and law enforcement officials.
Security tokens may be another option for law enforcement officials to consider. Unlike traditional tokens, these tokens contain KYC and AML regulations directly in their coding. This removes anonymity from the crypto space. Authorities believe this approach can reduce the use of crypto in illegal activity.
While still new in the crypto space, these coins continue to see increased adoption. This evolution creates cryptocurrencies that fit into the current financial regulations. These regulations require users to provide relevant information including their true identity. Many believe these tokens are pivotal in reducing the amount of illegal activity in the space.
Blockchain Law Enforcement Strategies
As crypto adoption continues on its path, there is undoubtedly going to be increased interest in the fields of monitoring and tracking blockchains transactions. Law enforcement agencies look towards these new tools to combat advanced criminals. The stakes are high, especially when you consider the amount of cryptocurrency that governments already confiscated.