Blog - As Cryptocurrency Activity Soars, Cutting-Edge Tools Critical To Uncovering Criminal Activity

Cryptocurrency is becoming an ever-larger part of the global financial system. As more individuals and organizations use cryptocurrencies and crypto adoption rises, the opportunities for bad actors to abuse this new technology also increase.

According to a recent survey by INTERPOL, in its first Global Crime Trend report, almost two-thirds of respondents regard crimes, such as money laundering, ransomware, phishing, and online scams as being high or very high threats. These financial and cybercrimes are the world’s leading current crime threats – and also those seen as increasing the most – said the majority of the police respondents.

As a result, the need to identify illicit cryptocurrency activity has become crucial to solving many cases.

Respondents in the INTERPOL report regarded money laundering as the biggest crime threat, with 67% ranking it as high or very high. Slightly below this was ransomware with a 66% ranking. INTERPOL said the report was based on responses received from professionals in its 195 member countries, in addition to information and detailed analysis from the international body’s data and other sources.

Meanwhile, the U.S. Justice Department is stepping up efforts to strengthen law enforcement’s efforts to combat the rise in crime linked to the use of cryptocurrencies such as bitcoin. More than 150 federal prosecutors across the country are to become part of the Digital Asset Coordinators Network which is intended to designate subject-matter experts in U.S. attorneys’ offices on the complex technical and legal complications posed by cryptocurrency cases.

Cybercrime-As-A-Service

Financial crimes and criminal cyber activities are almost always linked because so many crimes are carried out via digital technologies. Cybercriminals both make and whitewash their illicit gains online.

During the COVID-19 pandemic, the expression “cybercrime-as-a-service” became well-known. This is a highly organized business model where cybercriminals, malware developers, and other similar individuals and criminal organizations sold their cybercrime services to potential customers. The pandemic also led to the emergence of “financial crime-as-a-service,” which gives criminals the tools to launder digital money and enables them to cash out their stolen funds.

The increasing sophistication and scale of crypto crime are illustrated by the US Department of Justice’s announcement that the Internal Revenue Service had seized over 50,676 unlawfully obtained Bitcoin from a defendant named James Zhong. He pled guilty to committing wire fraud when he stole over 50,000 Bitcoin from the Silk Road dark web internet marketplace. The charge carries a maximum sentence of 20 years in prison.

Crypto Crime Posts Huge Numbers

A recent report by blockchain data platform Chainalysis revealed that cryptocurrency-based crime hit an all-time high in 2021, with illicit addresses receiving $14 billion, up from $7.8 billion in 2020. Cryptocurrency usage is growing faster than ever before, the company says. Across all cryptocurrencies tracked by Chainalysis, total transaction volume grew to $15.8 trillion in 2021, up 567% from 2020’s total.

And crypto criminals continue to reach new levels of deviousness. Decentralized cross-chain bridges are an unregulated alternative to exchanges for transferring value between blockchains. One such bridge – RenBridge – has been used to enable the laundering of at least $540 million in proceeds of crime, according to one report.

The huge amount of cash moving through the online global system creates plentiful opportunities for criminals. One forecast estimates that at the current rate of growth, damage from cyberattacks could amount to around $10.5 trillion annually by 2025 – a 300% rise from 2015.

There are even cybercriminals who are earning more than billion-dollar corporations. Cyberattacks are helping criminals to steal their way to more than $1.5 trillion in revenue annually. By way of comparison, U.S. supermarket giant Walmart – one of the world’s biggest companies – reported revenue of $559 billion in 2021.    

Cellebrite’s Crypto Capabilities

Investigative organizations need to work with cutting-edge solutions. Cellebrite has partnered with leading blockchain industry company Chainalysis to expand and enrich our Digital Investigations (DI) suite of solutions with cryptocurrency capabilities. These solutions provide value to customers throughout all stages of investigations, including quick identification of crypto artifacts and automated assessment.

This blog was produced for Cellebrite.com and can be viewed here

This enables informed decisions and intelligent escalation within the investigative organization, efficient tracking of crypto activity and reaching key insights to help accelerate justice.