Opportunities for blockchain in police investigations


The problem of spreading cybercrime is becoming more acute today, and developed countries with high gross domestic product rates suffer from it to a much greater extent than developing countries. This is due to the fact that the more advanced technologies are used by society, the stronger its dependence is on digital structures. And this, in turn, creates more opportunities for cybercriminals. In 2021, the damage from cybercrime is predicted to be $6 trillion — twice as much as in 2015.

Meanwhile, the terms cybercrime and cyberterrorism differ in various legal systems. Some criminologists divide these concepts; others consider them as equivalents. Barry Collin, a senior research fellow at the Institute for Security and Intelligence in California, first defined the term “cyberterrorism” in the 1980s. He understood this meaning as a convergence of the virtual and physical worlds and saw no difference between cybercrime and cyberterrorism. Later, other definitions of the term appeared.

The United States Federal Bureau of Investigation refers to cyberterrorism as a deliberate attack on any information that results in violence against non-combatants and other social and national groups. However, this definition is rather vague because it easily classifies almost any online fraud as cyberterrorism. Another distinguishing feature of cyberterrorism is the frequent mention of it in conjunction with cryptocurrencies.

Tracking transactions

Blockchain technology offers a wide range of opportunities to investigate crimes and counteract possible attacks by cybercriminals. On one hand, a blockchain allows tracking suspicious transactions and blocking the movement of funds into the accounts of potential criminals and persons associated with them. It is also possible to track ICO venture funds to prove misuse and embezzlement of investors’ funds. On the other hand, the investigative data stored on the blockchain, as well as any other forensic databases, will be simultaneously more accessible and secure. This will allow law enforcement to safely store the full range of information you need — misdemeanor data, biometrics of citizens and stateless persons, criminal records, wanted lists and many others.

Many terrorists have begun to make their demands in cryptocurrencies, naturally giving it a bad reputation. Initially, cryptocurrencies were designed to be borderless, which means they should be more difficult to trace. Unfortunately, many governments have decided to take the easiest way out: to ban the use of cryptocurrencies on their territories. Many high-profile cases of fraud in the crypto space and the sharp decline in the value of cryptocurrencies in 2018 have put the nascent industry in an unsavory position in the eyes of law enforcement.

Recently, a number of companies have been actively developing blockchain solutions to fight money laundering. Some of them are being successfully used in the field of analytics and risk monitoring for cryptocurrency transactions. The blockchain analytics startup Coinfirm has developed an AML platform that allows tracking suspicious transactions and countering financial terrorism, using over 270 risk indicators. Also, French cybersecurity specialist Nigma Conseil and the Austrian Institute of Technology announced their blockchain platform for forensic science earlier this year. The platform aims to provide users with the ability to monitor and streamline block operations.

Cases of personal data and intellectual property theft are being recorded more often. The actions of cyberterrorists and cybercriminals discredit law enforcement agencies because most often, the latter are under-equipped to defend against such attacks and to respond to them promptly.

Hacking occurs both on the local level, such as the infamous Yahoo hack that targeted all 3 billion accounts of users, and on the international level where one country’s government blames another for the hacking, which leads to the deterioration of foreign relations. Before the advent of Bitcoin (BTC) in 2008, there was no solution to this problem and no alternatives to centralized data storage. Each database had a vulnerability that, if hacked, would allow access to all the stored data and unlock the freedom to make any changes at will.

Breaking into the investigation

The main problem is the principle of data storage. It is organized as a centralized system. When you gain access, you can easily make any desired changes or even delete all existing information. For example, the databases of the Ministry of Internal Affairs store sensitive information about wanted criminals. If the system is breached, hackers will be able to tamper with evidence, the result of which could potentially exclude criminals from ongoing investigations.

Today, the alternative to centralized information storage is the use of a blockage system: a system without central storage and a database administrator. Data is stored on the computers of all the network’s members. Integrity and security are guaranteed by using cryptographic primitives — hash function, asymmetric encryption, use of keys, etc. In addition, blockchain technology allows you to track who made these changes and when because you need a special key for access. All keys are not stored centrally, but personally with each user. There is no single point to attack the entire database, which means there is no way to steal all the data at once.

Databases of important state institutions are mostly maintained by a centralized organization. This means that in order to get information, the criminals would need to crack a single target, after which they can easily steal any data. If we imagine that the entire database of the Ministry of Internal Affairs is information distributed among several organizations, each organization would have its own access key, effectively increasing its security. With the help of blockchain technology, users can restore the chronology of making any changes to the database.

In the case of centralized databases, only backup copies are available at a certain point in time, but not the complete picture of all processes ever occurring in the database. In digital forensics, it is sometimes necessary to examine electronic devices and to extract their data.

Criminal case materials, protocols and information from different sources will soon be processed by artificial intelligence, and investigators will no longer have to do it manually, wasting valuable time and human resources. Thanks to technological advancements, the system will automatically detect suspects when they contact other persons. For example, the process of collecting evidence will be simplified: It will be possible to identify offenders by their DNA.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Maxim Rukinov is head of the Distributed Ledger Technologies Center at Saint Petersburg State University. He has a law degree and a Ph.D. in economic sciences. Maxim specializes in investment portfolio management and financial analysis. His expertise is confirmed by the MIT Sloan School of Management. He has also authored scientific publications on economic security and the impact of sanctions on the Russian economy.