(Cornwall, Ontario) Fake investments. drugs smuggling. Love tricks. Money Laundering. With cryptocurrency fraud reaching an “astronomical” level, the Royal Canadian Mounted Police (RCMP) launched a program this week to train about 20 of its officers in the complex reality of virtual currencies. Journalism Attended a Federal Police pilot project in Cornwall, Ontario.
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“We honestly had no idea what it was dark web Or bitcoin when we started this investigation. »
Corporal Steve Harton candidly recounts the twists and turns that led to the arrest of a major drug dealer – “Mr. Hotsauce” – in May 2018, in Toronto. At the start of the investigation, the RCMP only knew that the man was selling fentanyl, crystal meth, and other drugs under this pseudonym in a hypothetical marketplace in dark web. The police are not aware of his true identity and his ways of doing things in the field, between the time the illicit materials are ordered and the time they are delivered.
The image becomes clearer fairly quickly. Investigators discover that the drugs are hidden in musical birthday cards and then shipped from various Canada Post outlets. He tightens his grip after a breathless spin on the Toronto subway and a taxi chase through downtown streets.
After a few weeks of intense surveillance, RCMP officers searched the home of “Mr Hotsauce”. There they find not only the suspect, but also a pistol and large quantities of synthetic drugs, hidden in an unnatural semi-basement. They discover another important item: a computer that’s still running.
In the heat of the moment, the police are having reflexes to keep the computer active by constantly moving the mouse to prevent it from shutting down – a good time to call in reinforcements from fellow cybercrime specialists. Three hours later, they found a piece of paper with two ciphers written on it. This will be the cornerstone of access to cryptocurrency wallets of the stores, which is his preferred method of payment.
Made it possible to reconfigure two bags [de cryptomonnaies]Steve Harton told an audience of fellow RCMP who gathered this week at a hotel in Cornwall, Ontario:
What do you do with this $200,000+ loot? We must act quickly, while RCMP is still scanning the defendant’s computer. Site administrators are still contacting Adrienne Vickery, Chief Cryptocurrency RCMP. Further calls are made to the Canadian Government’s Directorate of Reserved Property Management. It was then agreed to transfer 22 bitcoins to a virtual RCMP wallet, a maneuver that had not been done before. This works.
This was the first time that a cryptocurrency had been seized as part of an investigation.
RCMP Corporal Steve Harton
Millions have been taken
The process marked a turning point for RCMP. The Federal Police Force has since succeeded in tracking down and seizing millions of dollars in cryptocurrency as part of criminal investigations, with the approval of the courts.
For example, 719 bitcoins, equivalent to about $35 million, were seized last January from Sebastien Vachon Desjardins, a Gatineau resident accused of ransomware exploits. (The RCMP declines to give the total number of seizures made since 2018).
Despite some successes, law enforcement is struggling to keep up with cybercriminals. Cryptocurrency fraud reports totaled $75 million last year in the country, compared to just 12.6 million between 2018 and 2020, according to data from the RCMP Anti-fraud Center. This is just the tip of the iceberg.
In an effort to combat this scourge, the RCMP’s Financial Crime Branch has set up an intensive week-long program to train 24 officers from across the country in various aspects of cryptocurrency. Since Monday, they have been presented with concrete cases, including that of “Mr. Hotsauce”, as well as conferences by experts from the private sector, such as those from Chainalysis.
Journalism He was able to attend part of that training on Monday, having made several attempts to speak to RCMP experts in recent months. The goal is to equip officers responsible for cryptocurrency in each county, who can then share their knowledge with their colleagues, Adrienne Vickery, Officer in Charge – Financial Integrity, explains the criminal operations of the Federal Police.
“My role as the National Coordinator for Cryptocurrency is to share intelligence, talk about challenges with investigations, so that we can collectively determine how the RCMP can move forward,” she says.
Counters and fraud
M’s role.me Vickery is relatively new: she was hired as a cryptocurrency coordinator in 2016. She says the RCMP does not have a team dedicated exclusively to virtual currencies, but rather uses agents who already have an interest in the matter. She says most of the 24 officers in Cornwall this week are familiar with the topic and even “invest” in cryptocurrency.
RCMP’s goal is to be able to keep up with criminals who are constantly inventing new schemes involving virtual currencies. Fraud of all kinds, Adrienne Vickery says, “is reaching an astronomical level here in Canada”. In the past year, scams involving fake investment platforms, which promise amazing returns, have multiplied.
Another common type of fraud is where counterfeiters pretend to be agents of the Canada Revenue Agency (CRA).
“They are telling the victims that if they don’t send money, they will be arrested,” the lady said.me Vickery. They will ask victims for their zip code and, while on the phone, check sites like Coin ATM Radar, which show where cryptocurrency ATMs are located, and direct the person to the nearest ATM. Ask him to insert money into it to send money [en cryptomonnaie]. »
Adrienne Vickery confirms that the proliferation of cryptocurrency counters is also in the sights of the RCMP. She points out that these machines, where you can buy bitcoin and other currencies anonymously with cash, are now six times more likely than they were at the start of the pandemic. Canada is the second largest market in the world, with 2,435 ATMs operating, according to Coin ATM Radar.
We are definitely interested in these machines. I think with any new system there is potential for money laundering.
Adrienne Vickery, Responsible Officer – Financial Integrity, RCMP Criminal Operations
Recent survey of Journalism It made it possible to determine that at least 270 of these counters have appeared in Quebec in recent years, in a rather great regulatory ambiguity. Revenu Québec, which is responsible for issuing operating permits, is unable to determine their number. The Financial Transactions and Reports Analysis Center of Canada (FINTRAC), which has federally overseen the industry since 2020, is also unable to provide a figure.
Such devices are considered by many authorities as an ideal method of money laundering, since cryptocurrencies can be purchased with cash with relative anonymity below a certain threshold – $1,000 in Canada. The UK banned them for this reason in March 2022.
The RCMP did not want to confirm whether investigations had already begun in the country regarding bitcoin counters. The same for the Sûreté du Québec and the Police Department in the City of Montreal. Adrienne Vickery remembers that many people use these machines – and cryptocurrency in general – for legitimate purposes, despite the scams being common.
The RCMP hopes to offer a new “National Crypto Investigator Course” four to five times a year.