Govt's think tank issues SOPs for crypto-related crimes

Law enforcement agencies should act fast to seize bitcoins or another cryptocurrency once it is established that such digital assets are used in crime and should be stored in an official wallet besides thoroughly documenting the scene.

These tips are part of a 64-page first-of-its-kind Standard Operating Procedure on Investigation Process/Methodologies for Cryptocurrency related Cyber Crimes prepared by the official police think-tank Bureau of Police Research and Development (BPRD).

The BPRD's SOP comes against the backdrop of an increasing number of cybercrimes involving cryptocurrency being reported in the country. The SOP provides a methodology for investigation as well as seizure and preservation of cryptocurrencies.

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Cryptocurrency is being adopted widely for its decentralisation and anonymous nature and this "pseudo-anonymous nature of cryptocurrency mainly bitcoin makes it an automatic choice for using it as means of currency for "nefarious purposes dark web markets, ransomware attacks, crypto-jacking, money laundering, tax evasion, etc", the BPRD said.

These crimes are directly facilitated by using crypto transactions whereas some crimes involve crypto directly such as Ponzi schemes involving cryptocurrency exchanges, and theft of cryptocurrency among others.

"As more and more users access the internet and are embracing technology, cybercriminals are looking at crypto-currencies for transactions. With the gaining popularity and awareness amongst the people of India with respect to cryptocurrencies such as Bitcoin, Ripple, Dogecoin, etc., many have started investing part of their time and money in these virtual currencies," BPRD Director (Modernisation) Dr Karuna Sagar said.

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According to the SOP, law enforcement agencies must have their own crypto wallets to store seized digital assets. It should also approach the crypto exchanges to block the wallet or reset the keys to defuse the transactions. If the wallet involved in the suspected crime is in a decentralised exchange, then the assets should be immediately transferred to the official wallet.

The SOP also warned against converting the seized cryptocurrency into local currency, saying it may cause legal consequences to the department due to the fluctuation in rates of the cryptocurrency in the market.

Once it has been established that there has been the involvement of bitcoins in a crime, there should be a quick response by law enforcement agencies to seize bitcoins. At this step, law enforcement should determine if it is possible to access the wallet by obtaining the necessary passwords or keys.

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If the crypto wallet is not encrypted, the SOP said, the agencies have complete access, provided proper warrants have been obtained for the seizure of the device. If the bitcoin wallet is encrypted, getting the suspect to give away the passwords is the easiest method of access.

If immediate access to the suspect’s wallet is not possible or the suspect is refusing to provide a password or encryption key, the device should be switched to aeroplane mode or placed in a faraday bag to prevent tampering, SOP said.

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