Most day-to-day crime fighting happens at the local level, but when it comes to crypto crime, local law enforcement isn’t ready to pick up the slack. Many small towns don’t have online reporting options, which means you’ll have to speak to a human – who might refuse to write a report if they can’t find your gory story about a cartoon monkey. of a credible or irresistible million dollars. When asked where someone should turn if their $250 NFT has been stolen, Chan replied that while local law enforcement is “definitely” the most appropriate place to go,” whether they are able to help you or not is another story.”
These types of crimes were inconceivable just a few years ago, but the alarming number of people who fall victim to them today needs help. “We need to normalize cybercrime as a real crime, and we need to normalize law enforcement involvement,” Garber says. “That means better education on both the consumer side and the law enforcement side.”
The FBI are trying to do their part, but Chan says, “We’re in the crawling phase, before we even walk. He notes that in-house cryptography training for the FBI’s own employees was only recently released. “In terms of training at the national level for state, local or tribal agencies,” he says, “I know we’re working on it. I don’t have a timeline for that, unfortunately.
Meanwhile, recognizing that mainstream law enforcement often lacks the resources and know-how to solve crypto mysteries, many government agencies are turning to private companies that pose as expert analysts. of the blockchain. Chan says the FBI tries not to “outsource” any of its investigative work, “because if we outsource it, it means another entity will have to testify in court,” and most juries are more likely to trust a special agent than an employee of a startup no one has ever heard of. Chan has agents on his team who perform their own blockchain analysis, working in tandem with private platforms to trace stolen virtual assets. “At least federally, I feel pretty good about our tracking and analysis of cryptocurrencies,” he says. But, again, things are “not as firm at the state level and at the local level.”
These state and local entities may not have the expertise to responsibly manage the tools that private companies make available. And as we have seen with private prisons and military contractors, the privatization of traditional law enforcement functions does not come free. State actors who investigate crimes are subject to stricter accountability and oversight mechanisms than private actors. The defendants have raised questions about the reliability and admissibility of private blockchain analysis evidence. The legal remedies for those harmed by private security guards are also different from those available to those harmed by government actors. Ultimately, for-profit companies don’t have to care about the public interest, and they don’t necessarily have to respect civil rights like privacy.
If local law enforcement falls short, we need to fix law enforcement, not hand the problem over to tech companies that are only beholden to their investors. Departments should start taking crimes involving even the most goofy NFTs seriously. To develop the skills they need, officers need to work on these cases. Chan says his office is currently working on a handful of NFT hijacking cases, though it’s not clear they would meet the FBI’s ordinary financial harm threshold, “just because we need to get some some muscle memory for these types of cases”. Investigators at all levels should do the same.
