US Postal Inspectors Need 'Comprehensive Crypto Training', Audit Says

The United States Postal Inspection Service (USPIS), the law enforcement arm of the United States Postal Service, conducted an internal i...

The United States Postal Inspection Service (USPIS), the law enforcement arm of the United States Postal Service, conducted an internal investigation Audit of the way he conducts crypto-related investigations and found that there was significant room for improvement.

Notably, the USPIS handled only a small number of crypto-related cases during the two fiscal years under review – 2019 and 2020 – with a total of four closed cases for which postal inspectors seized the crypto as evidence during an investigation and nine other cases that were handled under the USPIS “Cryptocurrency Fund Program”, established in 2017.

This program aimed to specify standards and policies that can help take into account cryptocurrency transactions during investigations and reduce the associated operational risks. As the report pointed out, this is particularly important given that “the anonymity of cryptocurrency transactions and large fluctuations in the value of the cryptocurrency create opportunities for abuse or theft when they are used in law enforcement activities “.

Despite the low volume of crypto-related activity, the USPS Office of the Inspector General (OIG) had determined earlier this year, a self-initiated audit was required given that cryptocurrencies can often be the ‘preferred medium of exchange’ for illicit activities such as ransomware campaigns, online scams and money laundering. money.

Evaluating operations during the two years under review, the audit report identified a “lack of standardized training” for USPIS employees regarding cryptocurrencies. This means that postal inspectors who conducted secret investigations and purchased cryptocurrencies as part of their business did not follow guidelines established under the cryptocurrency fund program.

While in some cases, inspectors have used the program to account for the crypto transactions they make for investigative purposes, the audit found that there are many legitimate cases where use of the program may not. be possible, such as when some cryptocurrency sellers only accept payment in the form of specific private cryptocurrencies.

In these cases, inspectors were required to request standard survey funds in the form of US dollars and were personally responsible for all crypto-fiat conversions and the management of unused survey funds.

It is in these scenarios that the audit identified a breakdown in communication between management and inspectors, meaning that program managers at present “cannot account for the total amount of cryptocurrency used. for investigative purposes throughout the postal inspection service ”.

Auditors therefore had to perform a manual keyword search for various crypto-related terms to attempt to determine whether or not cryptography had been used in certain investigative cases, finding 1,064 unique case numbers that will now need to be examined manually. On this point, the audit report concludes:

“The program is unable to achieve one of its primary goals – to help postal inspectors deal with the challenges associated with the inherent volatility of cryptocurrency – which ultimately leaves the Postal Inspection Service vulnerable to theft, to abuse and mismanagement of federal funds. “

The audit report recommended that in the future USPIS should ensure that the cryptocurrency fund program has the information it needs to provide oversight and that the agency also develops a program. comprehensive cryptocurrency training course for all inspectors. In addition, he recommended an overhaul of the current data management for survey transactions, which have been inaccurate and include duplicates, which again impacts the agency’s ability to track and manage accurately its crypto-related law enforcement activities.

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According to to Margaret McDavid, Deputy Assistant Inspector General in the Inspection Service and Information Technology Branch of the OIG Audit Office, USPIS was “involved in joint efforts to dismantle the Wall Street Dark Web marketIn 2019, which led to the seizure of over $ 25 million in crypto.