Army Investigative Unit Looks to Detect and Trace Cryptocurrency Transactions

A top Pentagon investigative unit charged with examining crimes on and off the battlefield—and increasingly in cyberspace—intends to tap an existing, cloud-based solution to more quickly detect suspicious or unlawful cryptocurrency transactions. 

The Army Contracting Command on Friday invited potential new partners to weigh in on their capacity to supply a cryptocurrency investigation service for the Army Criminal Investigation Command. 

“The web-based application must provide the capability to assist law enforcement [to] identify and stop actors who are using cryptocurrencies for illicit activity such as fraud, extortion, and money laundering,” officials wrote in the new request for information, adding that the service must enable users to conduct in-depth investigations “into the source of cryptocurrency transactions,” and offer “multi-currency analysis from Bitcoin to other top cryptocurrencies.”

Secured by cryptography, cryptocurrency refers to virtual currency transmitted via a digital and generally decentralized network. Without a central authority, cryptocurrencies are less susceptible to interference, and every transaction is recorded into a public ledger with codes that can be scrutinized to identify the parties behind the exchanges, which the Army explicitly aims to do. Adoption of the emerging currency is on the rise—and one recently released crypto-crime-focused report by blockchain analysis firm Chainalysis revealed 18% of all Americans, and 35% of American millennials, purchased cryptocurrency in some form in the last year. 

The online currency also has been used to fund illicit activities since its inception and that same analysis demonstrated that in 2019, 1.1% of total cryptocurrency transactions—roughly totaling $11.5 billion in U.S. dollars—involved or were associated with criminal activity. 

Cryptocurrency-based crimes are becoming more top-of-mind not solely to the Army, but across the federal government. The Justice Department in June unveiled that 15 people pleaded guilty to involvement in an international scam that laundered money through a cryptocurrency exchange. The Internal Revenue Service also recently announced it’s looking to hire a fraud detection analyst to help shape its evolving strategy and approach to cryptocurrency and cybercrimes. 

Tasked with conducting global investigations into felony crimes where there’s an Army victim, suspect, connection or interest, the Army Criminal Investigation Command ultimately aims to hasten the detection of criminal or suspicious financial connections and cryptocurrency transactions, and better track cryptocurrency connections with the to-be-considered tool. The unit originally launched a pre-solicitation for a similar crypto-tracking service in July 2019.

Specifically, the organization aims to tap into an easily accessible service that requires no software or hardware installations and has already been tested and proven as effective. The software-as-a-service solution will need to “provide real time Bitcoin and other cryptocurrency transaction tracing, [and] include service attribution and identification,” according to the request. Components that enable visualization and analysis of data are expected to be included, and officials also aim for the product to independently spot transaction patterns and capture interactions between entities. Technical support from the chosen contractor will also need to be provided around-the-clock.

The service will be headed by the Criminal Investigation Command’s Quantico, Virginia-based Major Cybercrime Unit, but users across the U.S. and from overseas locations will likely need to tap into it.

Interested vendors must respond to the request for information by July 20.