Digital currencies have already been seized by the law enforcement arm in previous investigations.
The Postal Inspection Service’s policies and procedures for handling virtual currencies are set to undergo a comprehensive review steered by the U.S. Postal Service’s top watchdog.
It marks the first time officials within the USPS Office of Inspector General will examine this topic—the effectiveness of those cryptocurrency-involved operations—via a formal audit, Margaret McDavid confirmed to Nextgov in a recent email.
“This is a self-initiated audit,” McDavid, deputy assistant inspector general in the OIG Office of Audit’s Inspection Service and Information Technology Directorate, said. “The use of cryptocurrency, or virtual currency, has been growing dramatically in recent years, and along with it, its role in criminal activity.”
Cryptocurrencies can come in the form of digital tokens. Their movements are recorded on a decentralized ledger, such as blockchain, and they’re accessible only to those who hold the keys.
According to an OIG announcement of the new audit, digital currencies can be the “preferred medium of exchange” for illegal moves like ransomware, scams and money laundering. Postal Inspectors, as part of the Postal Service’s law enforcement arm, might need to use cryptocurrency in the exposure of online criminal activities and seize such currencies as a result of their investigations.
This work at times unfolds undercover and on the dark web.
In the email, McDavid added that the fiscal 2019 “Postal Inspection Service annual report notes that the [service] was involved in joint efforts to dismantle the Wall Street Dark Web Marketplace (WSM), which led to the seizure of more than $25 million in cryptocurrency.” A Mercedes-Benz sports car and more than half a million in Euros were also seized in that investigation, the report detailed.
Policies and procedures for managing cryptocurrency, and their overall effectiveness, will be assessed in the OIG’s audit. Through the online post, officials asked those who work in law enforcement—and have experience dealing with virtual currencies in their work—to answer a range of questions including their practices for seizing it, risks and unique challenges encountered along the way, and more.
“We hope that law enforcement officials with experience using cryptocurrency during investigations, or with experience seizing cryptocurrency, would be willing to share their experiences with us,” McDavid said. “Since announcing the audit to the U.S. Postal Inspection Service, they have been very receptive to the work and are cooperating with us to get us the information we need.”
Responses can be submitted online and the report will likely be released in August.
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