Bitcoin and Encryption: A Race Between Criminals and the FBI

struck back in the past week with a pair of victories: a seizure of most of the $4 million ransom in Bitcoin that Russian hackers extorted from an American pipeline operator, and the announcement of a yearslong sting where thousands of suspects were duped into using a messaging app secretly controlled by the authorities.

Yet the events did little to fundamentally alter the challenges for the authorities in an increasingly digital world, according to former law enforcement officials, prosecutors, historians and technology experts.

“It shows that law enforcement is willing to design flanking maneuvers to go around encryption obstacles.

Law enforcement also has an advantage when it gets ahold of digital devices.

“Police today are facing a situation of an explosion of data,” said Yossi Carmil, the chief executive of Cellebrite, an Israeli company that has sold data extraction tools to more than 5,000 law enforcement agencies, including hundreds of small police departments across the United States.

The police also have an easier time getting to data stored in the cloud.

And on Friday, Apple said that in 2018, it had unknowingly turned over to the Justice Department the phone records of congressional staff members, their families and at least two members of Congress, including Representative Adam B.

Yet intercepting communications has remained a troublesome problem for the police.

Two of the world’s most popular messaging services, Apple’s iMessage and Facebook’s WhatsApp, use so-called end-to-end encryption, meaning only the sender and receiver can see the messages.

The authorities’ frustration has prompted them to target smaller encrypted apps favored by criminals.

They had to buy specialized phones with few working features, aside from an app disguised as a calculator.

The bureau and the Australian police started the operation by persuading an informant to distribute the devices to criminal networks, after which they caught on by word of mouth.

Criminals felt so comfortable on the service that they stopped using coded language, sending photos of smuggled cocaine shipments and openly planning murders, the police said.

For years, Bitcoin and other digital currencies were the coin of choice for international criminal syndicates.

That new model fueled a surge in ransomware attacks, where hackers take control of a person’s or company’s computers and demand a ransom.

Ransomware attacks have recently hit hospitals, meatpackers, minor league baseball teams and the ferries to Martha’s Vineyard.

Each transaction is recorded in a public ledger, making the money traceable even as it travels from one anonymous account to the next.

The history of the cat-and-mouse game between the police and criminals is long.

Today, law enforcement’s eagerness to keep up has spawned a rapidly growing industry dedicated to extracting suspects’ communications data.

At least 2,000 law enforcement agencies in all 50 states have such tools, including 49 of the 50 largest U.S.

Still, some of the nation’s top law enforcement officials have asked for more from tech companies and lawmakers.

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