In the wake of the global recession, budgets for all sorts of state and government departments have been under pressure. Pressure from banking bailouts, falling GDP and tax revenues mean that every penny counts for all sort of areas. Policing has been under similar pressure, it is often seen as an easy way to cut government spending. Despite what many Unions suggest, Police pay is usually very competitive although this is rightfully so considering the danger and risks many of them take.

A traditional route taken by many police departments across the world is to recycle the profits of criminals into the police budget. This has been done for years but with physical goods it’s often difficult as although it’s easy to establish ownership, taking possession can be more difficult. Cyber crime however offers another possibility for cash strapped police departments especially when you consider the growing use of cyber currency.

There is a huge rise in the number of cyber related criminal investigations and unfortunately many police forces are ill equipped to cope with this. However there are also opportunities particularly for large scale successful prosecutions relating to the proceeds that these crimes produce. Most countries have legislation in place that allows them to seize the proceeds of any criminal act and the sums involved can be huge.

Most police authorities are wisely investing any proceeds they recover in expanding their digital crime investigative resources. This is important as it can be very difficult to investigate these crimes because of a variety of reasons. Tracking the criminals can be difficult, they will invariably use things like VPNs and sneaker proxies in order to hide their location. There is also the issue that these crimes often take place across international borders too.

The German authorities for example have recently just made about $14 million through the sale of Bitcoin and other types of cryptocurrencies that they took possession of in criminal inquiries.

This was an unexpected emergency sale, according to a Monday report in the Tagesspiegel publication, because the Bavarian justice treasury was concerned about the wild changes in cryptocurrency prices. Emergency sales are normally typically kept back for perishable goods, such as food, or products which commonly depreciate in valuation, for example cars.

The cryptocurrencies that were sold– 1,312 Bitcoins, 1,399 Bitcoin Cash tokens, 1,312 Bitcoin Gold tokens and 220 Ether– were mainly seized in a clampdown on a website called LuL.to, which was unlawfully offering copyrighted ebooks and audiobooks at very low prices. The website was seized and blocked last June, its own operators were imprisoned and its resources went into a fund that is typically used for police resourcing.

The sale took place over a number of months, in a series of more than 1,600 transactions on a German cryptocurrency trading platform. According to Der Tagesspiegel, the proceeds totalled just over EUR12 million ($ 13.9 million.).

The selloff kicked off in late February, the moment the price of one Bitcoin had collapsed from its December highs– nearly $20,000– to around $11,400. Throughout the sale, the rate dipped below $7,000 and cleared $9,000 again. Ever since, it has dropped once more to a price of $7,230, therefore the cops’ timing looks pretty good for now, except if Bitcoin makes a surprising rebound in the near future.

This was a record-breaking transaction of seized assets within Germany, but American authorities have already been making a lot more money off confiscated cryptocurrencies for some time. The Justice Department got $48 million in October last year from the sale of Bitcoins that originated from Ross “Dread Pirate Roberts” Ulbricht. The sale in fact took place a couple years earlier, when one Bitcoin was worth a mere $330 or so, but Ulbricht, the operator of the Silk Road online drug market, had disputed the legality of the forfeiture and took a while to drop his claim

Cyber crime is without doubt the biggest challenge facing modern law enforcement in developed nations.  Most countries are allocating additional funding but it’s often difficult because the gangs involved operate from all sorts of countries often outside their jurisdiction.  All a criminal needs to do is to invest in a simple virtual private network which can be used to hide their true location and identity.  To further complicate the issue the VPN server location effectively becomes the point of origin of the attack too.  So if someone used one of these security VPNs like demonstrated in this post about how to watch the match of the day stream over the internet, then that would protect against all but the most sophisticated investigations.