For all the lack of progress on regulation, there is no getting away from the fact that crypto is increasingly used in illicit activities and even scammers are constantly attempting to extract payment in cryptocurrency from public. The situation is now bad enough that Britain’s top police organisation, the National Crime Agency (NCA), has felt the need to create a new team to crack down on the problem.
It is seeking officers with specialist experience in the sector to join the “new project that will form a specialised cryptocurrency and virtual assets team.” The NCA will initially place five officers on a “proactive cryptocurrency remit“.
A spokesperson said the move signalled an “increased focus” on crypto assets.
Current and former police detectives have said that crypto police face an uphill struggle due to a lack of funding and resources. Mark Jervis, a former cybercrime investigator with the Metropolitan Police, said there was “too much work” for law enforcement agencies, while most do not pay officers enough to stop them from moving to more lucrative private firms.
Digital assets crime rate climbed to a record high in 2022, with total illicit transactions reaching $20 billion, according to research by Chainalysis. However, the actual total is likely to be even higher – it was initially estimated there was $14 billion-worth of crypto crime in 2021, but the final amount was found to be $18 billion after more scams were found.
The NCA, the UK’s top police organisation, is setting up a new crypto unit to help tackle the problem. The unit will initially have five officers dedicated to digital assets crime as part of an “increased focus” on the sector. However, experts said five officers was not enough, and the £42,000 salary per annum advertised for one of the new team’s positions was too low.
“If the NCA and (the) government want the best investigators, they need to put their hands in their coffers and pay the staff proper rates,” added Jervis, who took a job with crypto exchange Kraken in 2022.
David Hale, a detective sergeant with Merseyside Police, in northern England, handling financial crime said: “Private industry often seek out our best and brightest, which leads to us needing to recruit and train further staff to meet the demand. The challenge for law enforcement is to make ourselves an employer of choice for professionals by developing them further and offering opportunities to progress.” He added: “It’s a hard task, though, when private industry can offer greater salary packages that (the public sector) cannot compete with.” Last year’s surge in digital assets crime happened despite cryptocurrencies such as bitcoin and ether plummeting in value. It was partly fuelled by sanctions imposed on Russian firms such as crypto exchange Garantex, following the country’s war on Ukraine.
Transactions involving sanctioned firms made up 44 per cent of the total. Levels of more conventional types of crime, such as fraud and terrorist financing fell slightly, except for stolen funds.
Alice Kemp, a barrister and senior associate at law firm RPC specialising in criminal tax cases, said: “Criminals are increasingly being paid in cryptocurrencies and using cryptos to launder the profits they are making from everything from drug dealing to sophisticated white collar crime.” Last year, the Home Office said it would give police more powers to clamp down on crypto crime, estimating that they could seize as much as £200 million a year in digital assets as a result of the changes. The powers include removing the need, in certain circumstances, for a person to be arrested before crypto assets can be confiscated. (The writer is our foreign correspondent based in the UK)
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