Bloomberg reporters share insights on how law enforcement seizes billions in crypto from criminals, discussing challenges in understanding value, access, storage, and legal procedures. They highlight UK police outsourcing to Kamani and FBI using blockchain analysis, emphasizing the complexities of storing and auctioning seized assets.
Law enforcement faces challenges in seizing intangible cryptocurrency assets requiring specialized knowledge and procedures.
Adapting to asset seizure involves training officers, appointing specialized advisors, and managing distribution dilemmas post-judgment.
Deep dives
Challenges in Seizing Crypto Assets
Law enforcement agencies worldwide face challenges in seizing cryptocurrency assets due to their intangible nature. Discovering and seizing these assets require specific knowledge and procedures, as accessing digital wallets involves using password seed phrases. Police often store seized crypto assets securely to prevent hacks or corruption within the force. However, the lack of standardized procedures poses challenges in handling, storing, and distributing seized cryptocurrencies.
Training and Outsourcing in Law Enforcement
Law enforcement agencies are adapting to the seizure of digital assets by training officers in crypto investigations and asset realization. Some agencies appoint specialized crypto tactical advisors to navigate the complexities of identifying and seizing cryptocurrency. To enhance expertise, agencies often outsource storage and sale of seized crypto assets, but face challenges as trained officers are lured by higher-paying firms, straining budget allocations and expertise retention.
Legal Challenges in Asset Distribution
The distribution of seized crypto assets post-judgment poses legal dilemmas for law enforcement. Court proceedings determine the fate of seized assets, considering factors like asset value fluctuations and victim restitution. Complexities arise as laws may lack provisions for managing crypto assets, leading to ad-hoc decision-making by law enforcement. Despite efforts to streamline procedures, challenges persist in aligning asset distribution practices with evolving crypto regulations.
Picture this: you’re the FBI, trying to track down the digital keys that will give you access to illicit or stolen crypto. In 2021 alone, cops in the U.S. and U.K, seized billions of dollars in Crypto-assets from various different criminal busts. With so much money on the line, enforcement agencies around the world have had to learn quickly how to spot these digital assets and seize them from accused criminals. In this episode, Bloomberg reporters Ellen MiIligan and David Voreacos join to discuss how the seizures of digital assets are transforming policing policies and protocols around the world.