In a recent survey titled “Tackling Crypto Crime,” conducted by TRM Labs with the participation of over 300 U.S. and international law enforcement professionals, compelling insights into the challenges and preparedness of agencies in dealing with cryptocurrency-related offenses have emerged.
The survey reveals that while over 50% of federal agencies currently employ blockchain analytics tools, a mere 11% of state agencies do so. A noteworthy 90% of respondents believe that their organizations provide crypto training, but an overwhelming 99% express the need for increased training initiatives.
The majority of respondents, constituting 93%, represent U.S. law enforcement, with a significant representation from federal agencies and the remaining from state, county, and local agencies. Intriguingly, 40% of their recent investigations involved cryptocurrency, and this figure is anticipated to rise to 51% by 2027. Despite these projections, a significant portion of law enforcement professionals feel ill-equipped for the challenges posed by the increasing involvement of crypto in criminal activities.
The survey, conducted by an external polling company between October 18 and November 3, 2023, targeted respondents with at least one year of employment at their current law enforcement organization and involvement in investigating or overseeing at least one cryptocurrency-related criminal offense in the past year.
Highlighting the technological divide, the survey emphasizes that while over 50% of federal agencies leverage blockchain analytics tools, a mere 11% of state agencies utilize such advanced technology. Approximately 61% of respondents indicate a lack of advanced technology as a barrier to adequately address crypto criminal threats.
TRM Labs data indicates that cybercriminals stole approximately $1.7 billion worth of crypto between January and November 2023, showcasing a notable decrease compared to the previous year.
Specific incidents, such as the exploitation of the HTX exchange and Ethereum bridge resulting in an $87 million loss in November, underscore the ongoing challenges. This breach occurred shortly after the unauthorized withdrawals faced by crypto exchange Poloniex. The Internal Revenue Service (IRS) further emphasized the crypto-crime landscape by including four cryptocurrency-related cases in its list of the top 10 cases for 2023.
Despite recognizing the critical importance of investing in blockchain analytics—acknowledged by 80% of survey participants as a “critical” or “high” priority—the TRM Labs report indicates that U.S. law enforcement has yet to fully implement its plans to educate staff on crypto matters. Notably, over half of the respondents identify the shortage of investigators, expertise, and funding as the primary obstacles hindering law enforcement’s effective combat against crypto crime.