The association hopes to offer training and support to other law enforcement agencies.
One of the world's largest blockchain data platforms is partnering with the Calgary Police Force to combat cybercrime following a spike in complaints from Calgarians about cryptocurrency scams.
Chainalysis, a United States-based blockchain data platform, provides data, software, and research services to government agencies, financial institutions, cybersecurity firms, and law enforcement organizations.
โCyber โโis quickly becoming a component of most criminal activity and often requires collaboration between law enforcement and other industry experts.โ
With Chainalysis, the Calgary Police Service Cyber โโForensics Unit has created the CPS Blockchain Investigation Team (BIT), dedicated to supporting cryptocurrency and blockchain-related investigations.
Cybercrime, particularly cryptocurrency scams, can be difficult for law enforcement to fully investigate due to a variety of complex factors, including multiple international locations and jurisdictions, sophisticated criminal techniques, and rapidly advancing technology.
Calgary police previously warned Calgarians that victims are usually targeted through advertisements on social media platforms. In some cases, victims believe they are contacting a familiar friend or advisor who advises them on how to set up a cryptocurrency account through a legitimate website. The victim then transfers money to what she believes to be investment accounts provided by the adviser.
The police service partnered with Chainalysis after Calgarians reported a $13.9 million loss to the Calgary police from cryptocurrency-related crimes last year. So far, another $3.2 million has been reported in 2023.
According to Chainalysis research, with the increase in the adoption and use of cryptocurrencies and digital assets in Canada has come a corresponding increase in cybercrime. Canada ranked 22nd in our Global Cryptocurrency Adoption Index in 2022, up from 26th in 2021 and 24th in 2020.
Canadian engagement with crypto ATMs, decentralized exchanges, and centralized exchanges shows that Canada has seen a nearly 213 percent increase in crypto usage from 2019 to January 2023.
At the same time, for every 1,000 Canadians, there was at least $1,144 CAD in total exposure to illicit crypto activity in 2022 alone, Chainalysis reports. The top 10 scams in terms of revenue alone grossed over CDN$41.7 million in Canada in 2022.
The police service and Chainalysis are calling the center that will house the CPS Blockchain Investigative Team the Western Canada Cryptocurrency Research Center. They claim it will strengthen the ability of the Calgary Police Service to ensure the public safety of citizens, according to police. It will also enable proactive surveillance, improve technical investigative skills and provide expert training resources for law enforcement, the police service said.
โCyber โโis quickly becoming a component of most criminal activity and often requires collaboration between law enforcement and other industry experts,โ said Police Chief Mark Neufeld of the Calgary Police Service.
Chainalysis and the Calgary Police Service intend to offer training to other law enforcement personnel as well as case support. Chainalysis claims it has a long history of supporting law enforcement officials. Its data platform and team of experts have helped cases involving child abuse material, dark web markets, ransomware gangs, North Korean hacking and more, leading to the seizure of billions of dollars in cryptocurrencies.
Chainanlysis said the partnership will offer a global blueprint for public-private sector partnerships when it comes to increasing the security of cryptocurrencies and provide significant opportunities for collaboration between law enforcement and leading industry experts.
The Calgary Police Service is not the only law enforcement agency investigating cryptocurrency-related crimes. The RCMP has been training more officers to tackle cryptocurrency-related investigations.
"Cryptocurrencies provide the means to move value anywhere in the world in minutes," said Inspector Adrienne Vickery, RCMP officer in charge of the Cryptocurrency Program with the Federal Criminal Operations Police - Financial Crimes Section. โWhen it is done for illicit purposes, we have to use all our investigative techniques to find the source of the funds and prove the criminal offence.โ
Cryptocurrency has become a source of access to launder millions in criminal cash, because it can be exchanged for legal tender paper money, such as Canadian or US dollars. A total of $75 million was linked to cryptocurrency-enabled fraud in Canada in 2021, up from $22.8 million in 2020 and $8.2 million in 2019. according to the RCMP.
Vickery became the RCMP's Cryptocurrency Coordinator in 2016 and has been building the agency's capacity to tackle crime associated with digital currency ever since.
