We had a discussion at work today regarding crypto currencies and what we would do if we were to seize bitcoins during an investigation.
How can we prevent the suspect from accessing / moving the money while assuring the security of the Bitcoin seized ?
A couple of scenarios were on the table and each brings it's own set of challenges.
1. Moving the money to an hardware wallet and store the wallet in the evidence lockup.
—– Challenges - Where do you store the backup wallet seed to be safe?
- Can these hardware wallet be stored for multiple years?
- Will those wallet still be supported in a couple of years?
- If number of BTC (or cash value) exceeds a threshold, should it be locked in an even more secure place ? (safe in the evidence locker, bank safety box, etc.) If so, who should have access?
2. Creating a multisig wallet.
—– Challenges - How many signatures should be registered on the wallet and how many are required to accept a transaction?
- A policy would be required to regulate how those people manage / store their signatures.
- Which platform to use?
I was sondering if some members had already done some of this research and could provide some best practices based on their experience?
A suggestion completely out of left field, but perhaps you could use Coinbase (https://www.coinbase.com/) to store seized Bitcoins.
Coinbase might be open to creating a LE only repository for seized Bitcoins.
Another possible online source to hold seized digital currency would be Kraken (https://www.kraken.com/) as Kraken can hold multiple types of digital currency, not just Bitcoin.
Or, how about printing the Bitcoins to paper for storage https://www.coindesk.com/information/paper-wallet-tutorial/
If you would like, PM me and I will connect you with my brother who is a digital currency expert at least compared to me (he is not LE but he certainly knows how to securely store digital currency). My brother also performs digital forensics on the civilian side.