Chainalysis, a leading blockchain data analysis service provider, has warned of huge current and future problems that public agencies involved in investigating digital assets crimes may face if they do not keep up with the digital assets industry.
In its Chainalysis 2022 State of Cryptocurrency Investigations Survey report, the blockchain intelligence firm stated that with the rapid evolution of the digital assets industry, criminal elements may expand the knowledge gap between them, law enforcement, and regulatory agencies that do not improve their investigation proficiency.
“If agencies aren’t becoming proficient in cryptocurrency investigations now, their knowledge gaps could compound, causing them to fall further behind the criminals exploiting cryptocurrency regularly,” Chainalysis said.
The firm was speaking about the survey finding that showed 74% of about 300 respondents from 183 public agencies in the U.S. and Canada considered their agencies not “well-equipped to investigate cryptocurrency-related crime.”
Additionally, an overwhelming number of the respondents also reveal that they consider their agencies to not be making enough efforts to remedy the situation even though digital assets-related investigations are relevant to them.
However, the respondents still hold a highly optimistic view of the digital assets industry. The survey revealed that more than half of the 300 respondents see over 10 digital assets-related cases in a year, while nearly 40% see more than 20 incidents. Regardless, most of them still maintain that the industry has far more legitimate use cases and will positively advance the financial system.
Digital assets crimes can be curtailed with more effort
In the report, Chainalysis recommends that public agencies should onboard the right tools with trustworthy data; invest in training, and; partner with the private sector if they are to avoid the pitfall of being left behind by the industry.
The report is coming at a time when digital assets crimes, from phishing to ransomware attacks and money laundering, have been increasing. Investigations by Chainalysis and others have also revealed that some crimes are sponsored by governments looking to evade sanctions like North Korea and Russia.
However, blockchain experts have assured that the tools available to investigate these crimes and the very nature of blockchain technology make the industry a poor choice for criminals to use. During a senate hearing, Jackie Koven from Chainalysis said that blockchain transactions could be traced no matter the technology used to obfuscate their trail.
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