Last year, there arose a problem in the cybercrimes unit at the Benton County Sherriff’s Office in Arkansas.
Olin Rankin, an officer specialized in electronic crimes at Benton County, says that there was a necessity to use Bitcoin; however, the staff felt hesitant to buy it using the credit card that belonged to the Sheriff’s Office.
According to Rankin, he had to opt using his own credit card to buy the Bitcoin online so that they could plan how to spend the money during a cybercrime crackdown.
Rankin, however, was aware that it was not an advisable decision to use his own debit card to buy the cryptocurrency.
He says that they had to find a way to obtain Bitcoin on their side without having a personal side of it attached.
Bitcoin has become a very popular cryptocurrency even though it has only been in existence for only a decade.
Due to its flexibility, it enables users to easily make purchases internationally since it is not controlled by any one government or bank. Bitcoin enables users to buy items without having to identify themselves, thus solidifying its popularity among criminals conducting illegal activity online.
The process of acquiring Bitcoin is very easy. It is as simple as opening a bank account—after setting up the account on a Bitcoin exchange and confirming your personal details, you have to click a button to buy Bitcoin and store it in your online Bitcoin wallet.
One can also opt to personally “mine” Bitcoin using mining hardware. Here, the miners are supposed to carry out complex calculations so that they can earn the cryptocurrency.
Rankin elucidates that a Bitcoin miner is a machine designed to purposely screen and confirm the transactions that are carried out on a Bitcoin network while miners are given a reward for the effort they produce to verify these transactions.
Challenges in the Pilot Program
To use Bitcoin in the vice operations, Benton County Sheriff’s office had to decide whether to purchase the cryptocurrency on the exchange, which meant that it was difficult to know the source of the Bitcoins or opt to mine the Bitcoins themselves—meaning that they had to mint a new Bitcoin by creating it.
Lt. David Undiano of the Criminal Investigations Division says that when Rankin went to him with the idea to use Bitcoin, he assumed he’d come across the idea elsewhere. But after conducting a little more research, they realized that there was no existing policy on how to handle Bitcoin.
As a result of this finding, they came up with some questions on how they would manage the funds, who was supposed to be on the knowledge of these funds and how to keep the cryptocurrency safe.
One of the difficulties they encountered was the need to use untainted Bitcoin to crack down on cybercriminals.
They decided to mine Bitcoins themselves, which was safer than buying them on the exchange. Lt. Undiano assured the public that the Bitcoins they are using to conduct the investigation are clean.
He further stressed that they mint them themselves and that they are not sourced from criminals on the dark web.
After the decision was made to mine Bitcoins, it was necessary to form a strategy to ensure the Bitcoins’ safety once they obtained them. The agency decided to use a program that allowed them to safely keep their cryptocurrency away from hackers’ reach.
Once the safety procedure was in place, they then had to determine the usage of power that would be required to mine the Bitcoins. Rankin says he lends his own mining machine to the Benton County Sheriff’s Office for the mining process.
Rankin says the miners possessed a range of styles such as high hash rates and low hash rates. He further adds that a few were rack styles—some had just one air conditioner and others had up to four air conditioners.
He says that to allow testing, there was a need to acquire a range of miners in order to put to trial their facility capability.
Undiano admitted that the whole feasibility study was aimed at making the tests, noting that they had to monitor what was happening running the two miners against one.
He says that they wanted to observe the change if they had to run it at its maximum speed against rewinding it to save on energy.
The observation they made was that the unequal usage in power was found to be inconsistent having a slight variation in their usage of power during the three-month trial period.
The high energy rates that the miners consumed, however, meant that their office was supposed to store them in a place with lower temperatures to avoid any hitches with the machine.
Vice Operations Eased by Bitcoin
Both Rankin and Undiano termed the feasibility study a success.
Depending on the site they were using for the undercover operation, the investigators generally had to use Bitcoin in order to post and promote their ads to lure interested buyers.
The Sheriff’s Office initially had challenges with getting the ad promoted to the top of the page, which greatly affected the operation’s efficiency.
The cryptocurrency also helps the agency gain their way to the dark web to track illegal activities.
The investigators noted that the anonymity of Bitcoin does not mean transactions cannot be traced back to the individual. Based on the initial steps the suspects choose to take, there are means to track them back to the individual behind the transaction.
According to Rankin, if the suspect is not cautious and converts the coins into cash using a U.S.-based exchange, they can be able to trace it to the account the Bitcoin was cashed-out to. He says that the suspect might not be in Arkansas, but they have a task force that works closely with the Department of Homeland Security.
Feasibility of the Project for Other Agencies
Both Rankin and Undiano warn the agencies looking into a similar pilot program to be cautious.
They note that the operation was not easy, saying that there was a list of factors that needed a bit of deliberation.
The Bitcoin miners have varying prices depending on a number of factors.
Rankin says most Bitcoin miners come from China but one can obtain the ones already in use in the U.S., adding that it would cost a little more money than buying them straight from the manufacturer.
The concern with buying them straight from the manufacturer is that it takes a lot of time awaiting production and import.
Any agency seeking to start a similar program is also advised to look at the efficiency and power usage of the miners they are interested in buying.
Rankin advises that the Bitmain Antminer S9 is the most efficient and profitable miner. On average, it costs about $2,000 per miner which may not come with the supply of power which goes for $150-200.
Rankin says that cheaper miners are available, though they’re less efficient. According to him, one does not have to use a lot of money to implement the most efficient and modern equipment—instead, they can build their own successful program.
Their office admitted that after conducting the trial program for a while, they observed that they had made substantial returns for their operations—enough to close the miners involved in the process.
Ultimately, Undiano says, the main motivation behind the operation was to understand how cybercrime works so they could ensure no one in their area is using Bitcoin for nefarious purposes.