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Cryptocurrencies now play an “endemic role” in organised crime, according to London’s Metropolitan Police, which has set up a dedicated team to combat growing illicit activity in the digital assets sector.
The Met, the UK’s largest police force, has bolstered its anti-crypto crime efforts over the past year. It began recruiting a crypto investigation team last December that now has about 40 members of staff.
“Crypto was once considered a niche within criminal enterprises, but there has been growing evidence that is no longer the case,” Detective Inspector Geoff Donoghue of the Met’s crypto investigation team told the Financial Times.
“Cryptocurrencies give a new dimension to the settlement of value transfer . . . everywhere that we have looked, we have found [crypto]. The evidence is suggesting an endemic role of cryptocurrency in organised crime,” he added.
“Drugs, guns, girls and workers . . . there has been growing evidence that there has been the emerging use of crypto within those fields as well.”
The Met said the team had begun operating in May and had “investigated 74 intelligence referrals to date and as a result have 19 current active criminal investigations”.
The force’s increasing focus on crypto comes at a tumultuous time for an industry facing a blitz of enforcement actions and scandals.
US regulators have this year sued industry bellwethers Coinbase and Binance. Earlier this month Israeli police closed more than 100 crypto accounts suspected of being linked to terrorist activity following Hamas’s attack on the country on October 7.
The sector’s links to crime in the digital sphere — including ransomware and ID theft — are well established. Israeli-based ID management firm AU10TIX — used by the likes of Google, Microsoft and PayPal for ID verification — found earlier this month that almost half of all identify fraud attacks in the second quarter of this year targeted the cryptocurrency and trading sector.
Mat Stanley, a detective sergeant in the Met’s cyber crime unit, said that the rise in crypto crime had not been affected by falls in the prices of digital coins such as bitcoin and ether.
“We’ve sat through a couple of crashes now . . . but if you’re buying £100 of drugs, you don’t care if that costs one bitcoin or 0.1 bitcoin,” he said.
The Met’s crypto push has come while the UK sits at a crossroads on the digital assets sector. The government in February unveiled plans to regulate crypto to standards closely in line with traditional financial assets such as stocks and bonds, a move met with calls from a cross-party group of MPs to instead treat crypto as gambling.
The government’s ambition to unveil London as a hub for crypto assets has also clashed with the Financial Conduct Authority’s new standards for the promotion of crypto products, which are among the toughest in the world. They carry an unlimited fine and potentially up to two years in prison for those promoting products without approval.
City minister Andrew Griffith urged the regulator to show restraint just days before the new rules came into force, the FT previously reported.
Since their implementation the FCA has sent more than 150 alerts on unauthorised crypto groups’ promotions, and Binance — the world’s largest exchange — has said it will no longer take on new UK customers.
