Canada to create central repository for seized NFTs, digital currencies

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Canada is taking additional action against digital currency bad actors in the country with the planned establishment of a solution to “facilitate the seizure and storage” of digital assets.

According to the Government of Canada, the Royal Canadian Mounted Police (RCMP) and Shared Services Canada (SSC) seek applications to create a digital asset repository to store seized assets.

Given the rise in digital currency hacks and exploits, the RCMP is now turning to private-sector innovation to heighten its industry monitoring.

The RCMP disclosed that the solution would extend to the seizure and storage of non-fungible tokens (NFTs) built on networks like ETH, Solana, and Polygon.

“The RCMP requires the ability to safely and securely store digital assets that have been seized and retained, until their eventual disposition at the conclusion of any legal proceedings,” the announcement read.

Per the tender notice, the RCMP is eyeing the creation of a “central repository solution” while looking out for several key features. First, the proposed solution should be able to process transactions from the leading 20 blockchain technologies by market capitalization and support NFTs.

The law enforcement agency places a premium on highly scalable systems, stating that solutions should be able to onboard new blockchains in the future. Regarding the user interface, the repository is expected to “automate wallet recovery,” generate cases using police file numbers and provide automated notifications on any transfers.

Other features expected by the RCMP include launching a web interface for access to the repository, a native Android application for police mobile devices, and proper procedures to dispose of digital assets.

“Develop a secure process to protect assets in custody ensuring protection of private keys from exploitation resulting in loss of assets,” the announcement said.

Applicants are expected to submit before September 21 with the listing designating the funding mechanism as a contract.

Cracking down Web3 crime

A recent RCMP report stated that Canadian citizens in Richmond lost over $2.6 million in digital currencies via romance scams and fake investment opportunities. Several reports have underscored the increasing number of digital asset crimes in Canada, prompting law enforcement to up the ante in cracking down on bad actors.

A collaboration between the RCMP and the Federal Bureau of Investigation (FBI) in the United States led to the recovery of over $34 million in digital assets. In April, the Calgary police teamed up with Chainalysis to create a new investigation center for digital currency crime, to offer 24/7 assistance to local law enforcement.

Watch: Digital Asset Recovery on Bitcoin Explained