The advent of blockchain-based technologies has opened a new frontier for people who want to conduct financial and other transactions remotely, anonymously and without the need for a third party such as a bank. Cryptocurrency is increasingly an accepted form of payment in many legitimate business transactions, but it is also used to enable many illegal activities, which to a large extent is precisely because of its ability to facilitate mostly anonymous transactions remotely.
In the United States, with support from the National Institute of Justice (NIJ), researchers from RAND Corporation and the Police Executive Research Forum identified, at a conference, the main needs for improving police policies and procedures on cryptocurrencies. These needs relate to policies for digital key management, resources for law enforcement training on blockchain and cryptocurrency and tools to investigate these types of currencies.
Participants prioritised needs associated with increasing the level of knowledge of officials and investigators, training or hiring experts who can assist with investigations and adapting existing policies and procedures to ensure that cryptocurrencies are managed responsibly.
Among the recommendations made at the conference were:
- Identify best-practice policies and procedures to quickly secure cryptocurrency assets in investigations.
- Develop best-practice policies and procedures to minimise opportunities for mishandling of cryptocurrency.
- Identify best-practice policies and procedures for storing, transferring and writing digital cryptocurrency keys in record-management systems.
- Catalogue and publicise the training resources already available, including training that is not adapted to legal professionals.
- Develop regional or national exchange systems that facilitate the exchange of training materials and intelligence for ongoing cases.
- Develop model materials that can be easily adapted for the training of trainees, investigators, forensic experts, prosecutors, judges and others.
- Conduct research to examine the balance of skills and knowledge that law enforcement agencies look for when hiring and assess whether they are likely to meet current and future needs.
- Convene a permanent group of professionals and experts who can review and generate requirements for research and development organisations.
- Work with federal, state, local and private entities (e.g., the Regional Computer Forensics Laboratory or Lawyers Without Borders) to make appropriate cryptocurrency-tracking resources available so that costs can be more easily shared.
- Evaluate the costs and benefits of developing a private-sector information centre that would enable the public sector and the verified private-sector entities to coordinate (in the same way that the National Center for Missing & Exploited Children examines potentially abusive materials).