In many ways, and in many countries police investigation has struggled to keep up with the rise of cyber crime. There are numerous issues and challenges and it’s not surprising that most authorities have been under sever pressure to cope with even investigating many of the crimes. Cyber criminals are of course spread all over the world which is one of the primary issues, a victim will likely be in a completely different country than the attacker.
This obviously makes investigating the crimes much more difficult as often the attacker will base themselves in countries with weaker digital laws. They will also use VPNs and proxies in order to hide their real location and circumvent investigations. For example an attacker in Europe could route their internet connection through something like a sneaker proxy (a specialized proxy server with a residential IP address)
Obviously developing digital crime investigation units takes lots of time, effort and of course resources. This is important factor and one in which most countries have put in legislation to assist with. The proceeds of digital crime can be significant and can be used to offset some of the extensive costs.
The German authorities have recently just made about $14 million directly from the sale of Bitcoin and other cryptocurrencies that they confiscated in criminal probes.
It was actually an unexpected emergency sale, according to a Monday report in the Tagesspiegel paper, because the Bavarian justice treasury was concerned about the wild changes in cryptocurrency prices. Emergency sales are normally generally kept back for perishable products, such as food, or items which commonly decrease in market value, for example cars.
The cryptocurrencies which were actually sold off– 1,312 Bitcoins, 1,399 Bitcoin Cash tokens, 1,312 Bitcoin Gold tokens and 220 Ether– were primarily confiscated in a crackdown on a platform called LuL.to, which was unlawfully offering copyrighted ebooks and audiobooks at very low prices. The web site was seized and blocked out last June, its own operators were arrested and its assets entered into a fund which is normally used for law enforcement resourcing.
The sale occurred over a couple of months, in a series of more than 1,600 transactions on a German cryptocurrency forex platform. According to Der Tagesspiegel, the profits totalled just over EUR12 million ($ 13.9 million.).
The selloff kicked off in late February, the moment the price of one Bitcoin had collapsed from its December highs– almost $20,000– to around $11,400. Over the course of the sale, the price dipped below $7,000 and cleared $9,000 once again. Ever since, it has fallen once more to a price of $7,230, therefore the cops’ timing looks pretty good for now, unless Bitcoin produces a surprising bounce back in the future.
This was a record-breaking sale of seized possessions within Germany, but American powers have been making even more money off seized cryptocurrencies for some time. The Justice Department got $48 million in October last year from the sale of Bitcoins which came from Ross “Dread Pirate Roberts” Ulbricht. The sale in fact took place a couple years earlier, when one Bitcoin was actually worth a mere $330 or so, but Ulbricht, the operator of the Silk Road online drug market, had disputed the legitimacy of the forfeiture and took a while to drop his claim.
Solving these crimes can be extremely time consuming especially when the criminals are skilled. Hiding their locations using VPNs and proxies make it very difficult to identify even the origin of the attacker. Even if you can identify individual IP addresses of proxies there’s still problems. Many of the most sophisticated attacks route their connection through multiple layers and even use rotating residential proxies which switch addresses every few minutes.