MHA Releases Standards for Crypto-Related Crimes | Latest India News
A police think tank has for the first time released a standard operating procedure for law enforcement in India on how to investigate crypto crimes and seize and safeguard cryptocurrencies during the investigation .
Law enforcement must have their own crypto wallet to store seized virtual digital assets, and they must liaise with crypto exchanges to block a suspect’s wallet or reset keys to defuse transactions in an ongoing investigation. course, as directed by the Bureau of Police Research Development. (BPRD), a think tank under the Interior Ministry, said in its guidelines.
Investigators dealing with cybercrimes involving cryptocurrencies have been asked to thoroughly document the scene during the process of opening a crypto wallet so that the evidence can be preserved and used in court.
Currently, there are no national guidelines on cryptocurrency-related cases, due to which law enforcement agencies often struggle, especially in seizing and tracing suspects.
Although the central government has started taxing income from crypto transactions at the rate of 30%, the country has yet to regulate cryptocurrencies and investigations into such cases are probed through existing cyber laws.
Illicit transactions using cryptocurrencies in 2021 were estimated at $14 billion, up 79% from $7.8 billion the previous year, according to a Jan. 6 report from The Wall Street Journal.
The value of Bitcoin alone currently stands at $1.98 trillion, Reserve Bank of India Deputy Governor T Rabi Shankar said during a speech to the Indian Banks Association on February 14. . There were 17,436 cryptocurrencies and 458 crypto exchanges, he said. .
Once it is determined that there has been involvement of cryptocurrencies in a crime, law enforcement should respond quickly to seize them, in accordance with standard operating procedure, which has been reviewed by HT.
“Law enforcement should determine if the wallet can be accessed by obtaining the necessary passcodes or keys,” the guidelines state.
If the wallet is not encrypted, the document says, officers could have full access (provided proper warrants were obtained for the seizure of the device), but if the wallet is encrypted, ask the suspect to providing the encryption code, passwords, or seed words was the easiest access method.
If immediate access to a suspect’s wallet is not possible, or if the suspect denies access to encrypted wallets, the affected device should be put on airplane mode or placed in a faraday bag to prevent tampering. according to the guidelines. A Faraday bag blocks electromagnetic fields and protects enclosed digital devices.
To open crypto wallets, agents can ask a suspect for passwords, seeds, or any credentials required to log in.
To store seized cryptocurrency, “law enforcement must have their own bitcoin/crypto wallet,” the office said.
For online wallets, the help of third parties where the currency is stored can also be taken to freeze accounts and help seize funds left online. “Police can do this using the same method to freeze traditional bank accounts, but the warrant must be directed to the operator of the online wallet,” the SOP said.
Law enforcement officers were asked to thoroughly document the scene during the seizure of cryptocurrencies.
Since access to a crypto wallet is often encrypted, the bureau instructed officers to follow best practices to maintain the current state of the device to prevent it from locking up when idle. , in case the suspect’s computer or mobile is unlocked. “In the case of a cell phone, a faraday bag should be used,” he said.
“The crypto wallet can be opened in another device by documenting the entire process with an independent witness following the appropriate chain of custody,” the SOP states.
According to Karnal Singh, a former chief law enforcement officer who investigates financial crimes, the biggest problem facing law enforcement in handling cryptocurrency-related cases is traceability. transactions and suspects.
“Since cryptocurrency uses a decentralized network of computers or nodes, it is difficult to know who is doing the transaction, and a person can have so many public keys and can be seated anywhere in the world, which makes it impossible to trace suspects,” Singh said.
A public key is like an account number, which is visible to anyone with internet access when transactions are added to the blockchain.
“While cryptocurrency is a boon to people in countries with unstable currencies, anonymity poses a major challenge to law enforcement. While all transactions are transparent on the blockchain, it is difficult to pin a wallet to an individual. As a result, it is a safe haven for criminals who carry out ransomware attacks, crypto exchange hacks, and transact in bitcoin,” said Tarun Wig, co-founder of Innefu , a data analytics and cybersecurity company.
“As a country, our law enforcement agencies do not yet have SOPs to investigate crypto crime and identify perpetrators,” Wig said. “While some of the exchanges have made KYC (know your customer) mandatory, there is an urgent need to pin every wallet to a physical entity and categorize all transactions on a risk score.”