The Challenges of Blockchain
It is difficult to use a Bitcoin address to identify the user. Prosecutors conducting investigations into cybercrime are still trying to find ways to connect specific MAC and IP addresses to the individual under investigation. If this person is using multiple proxies, TOR or IP addresses, the process becomes a lot more difficult. Another problem is the data given to most email providers by the users is unable to be validated by the providers. This holds true for cell phone companies as well. One of the ways law enforcement agencies are succeeding is by analyzing the data from numerous sources so the corrupt individuals can be identified. Despite the issues regarding blockchain, there are a few advantages for the law enforcement agencies.
The Anonymity of Bitcoin
From the perspective of law enforcement, Bitcoin does have some good features. All the transactions for a specific address can be tracked going back to the first transaction by using the records. This means law enforcement is now able to trace funds they could not in the past. There is less anonymity to Bitcoin than most people realize. A Bitcoin address is very similar to an account number. Once an individual has been connected to a Bitcoin address, all their transactions can be traced.
One of the most severe issues law enforcement agencies are facing is every internet and phone company has different regulations regarding the data of their users. Sometimes years are required to sort through the various providers, and this often involves several countries. It is difficult to find the provider with the necessary information to convict a cyber-criminal. Fortunately, law enforcement agencies can easily access information regarding the blockchain because it is stored indefinitely.
Third Party Doctrines
The concept of the third party doctrine is data shared with a third party such as an ISP should not be expected to remain confidential. This is what enables law enforcement agencies to obtain records from cellphone carriers, banks and ISP’s with a subpoena, not a search warrant. Accessing transactions regarding blockchain are even easier because law enforcement agencies do not need a subpoena. The design of the blockchain ensures it is accessible and open to everyone.
The Mutual Legal Assistance Treaty
When the United States law enforcement locates evidence in another country they have to adhere to the Mutual Legal Assistance Treaty or the MLAT. This is the only way to obtain assistance from a foreign agency. There is currently litigation between the DOJ, or the United States Department of Justice and Microsoft regarding a data center located in Ireland. The DOJ had a search warrant but Microsoft says this cannot be used to obtain data overseas. This is where law enforcement agencies have an edge with blockchain because MLAT is not applicable. A good example is the Silk Road investigation. A DEA agent named Carl Force was accused of Bitcoin theft. A chart was presented to demonstrate how the funds were tracked by law enforcement through the blockchain. Despite Carl Force splitting the transactions by using numerous addresses, it made no difference. The blockchain is new technology, and a lot of interesting information can be found through Mark Polelle.
Law Enforcement and Bitcoin
It is critical law enforcement agencies prevent Bitcoin from becoming the currency used by criminals. Criminals must not be allowed to feel secure using cryptocurrency. There will always be individuals using the unlicensed money, and this is a fact. Criminals will never be driven completely out of the internet or cryptocurrency. What is important is for law enforcement agencies to make it as difficult as possible for illegitimate businesses to make a profit. This is why law enforcement is placing their focus on the areas of the blockchain where crime occurs most frequently. They are using the most innovative and advanced tactics possible.