FameEX Hot Topics | Chainalysis Reports Law Enforcement's Positive Views on Crypto Despite Crime Concerns

Blockchain analytics firm Chainalysis has found that law enforcement views cryptocurrency as relevant to many investigations and generally holds positive opinions about it. However, there are concerns about the increasing criminal exploitation of cryptocurrency, including intellectual property theft and drug trafficking. Despite the availability of various tools, many respondents expressed dissatisfaction with current resources, emphasizing the need for better staffing and training.

In a blog post on Thursday, Chainalysis previewed its report titled “Crypto Investigations: Blockchain Intelligence for Law Enforcement.” The firm surveyed over 800 public sector employees globally to understand their views on blockchain technology and their ability to analyze crypto asset activities.

Chainalysis noted that cryptocurrency adoption continues to grow in 2024, enabling millions to transact independently of traditional financial intermediaries. This rise in crypto usage has been accompanied by increased criminal exploitation, extending beyond cybercrime to intellectual property theft and drug trafficking. Consequently, cryptocurrency has become a significant focus for public sector entities, including law enforcement, regulatory bodies, and military agencies. These entities aim to maximize the benefits of crypto while minimizing its misuse. According to Chainalysis: "Law enforcement respondents said that cryptocurrency is relevant to many of their investigations, but hold mostly positive views on crypto overall."

The firm explained that blockchain intelligence facilitates faster and more effective collaboration between law enforcement departments and government agencies during investigations. Using the same dataset contributes to a shared understanding, leading to better investigative outcomes. Additionally, blockchain intelligence can help law enforcement be proactive in preventing crime by detecting illicit activity early on through the analysis of on-chain transaction patterns and relationships indicative of criminal behavior.

The report also highlights regional differences, with respondents from Latin America and EMEA (Europe, Middle East, and Africa) showing the most optimism about crypto’s future role in financial markets. In contrast, those from the Asia Pacific (APAC) region exhibited more negative perceptions. Looking ahead, respondents anticipate that cryptocurrency will be involved in a broader range of criminal activities over the next five years. Despite the tools available for law enforcement, about half of the survey respondents expressed dissatisfaction with the current staffing and technical resources for addressing cryptocurrency-related crime, indicating a need for enhanced resources and training in this area.

Erin West, Deputy District Attorney for Santa Clara County, who has extensive experience with pig butchering cases, commented: “Building a community of dedicated experts is essential … You need a lot of partners. This is not something that one investigator can do by themselves. You need private partners, you need public partners, you need local law enforcement. You need federal law enforcement.” She believes forming smaller task forces nationwide is a great way to tackle crypto crimes.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.