As of August 10th, the RCMP has put forth a tender for companies to develop a repository meant to safely store seized digital assets associated with criminal activity. The Government of Canada states,
“The Royal Canadian Mounted Police (RCMP) and Shared Services Canada (SSC) are seeking the development of a digital asset solution to facilitate the seizure and storage of cryptocurrency and non-fungible tokens (NFTs) from multiple public blockchains.”
This tender notice was issued as agencies such as the RCMP have observed a growing trend in the utilization of cryptocurrencies and non-fungible tokens (NFTs) in unlawful activities.
What is the RCMP?
The Royal Canadian Mounted Police (RCMP) or ‘Mounties', are Canada's national law enforcement agency. The agency is charged with the enforcement of federal laws and statutes, with the RCMP playing a crucial role in maintaining peace and order across the nation.
Its responsibilities extend to the prevention and investigation of criminal activities, in addition to also offering policing services to provinces and territories without their own dedicated police forces. The RCMP's distinctive red serge uniforms have become an iconic symbol of law enforcement in Canada.
Why Is A Repository Needed?
This proposed system will be structured with the goal of facilitating the storage of confiscated digital assets “until their eventual disposition at the conclusion of any legal proceedings”. The proposed solution is designed not only to simplify the process of seizing these assets for law enforcement officers but also to incorporate robust security measures, thereby preventing theft while the assets are in storage. As new and inventive ways to store and transfer assets continue to emerge, Canadian law enforcement needs to keep up by developing safe storage procedures.
While it does not reference any official statistics, the RCMP puts forth that digital assets are increasingly being used as a means of payment and store of value, in addition to illicit activity. It notes that this is most evident through leveraging ransomware and malware attacks.
This tender notice, which looks to “leverage the private sectors innovation”, was put forth with the goal of creating a system that not only aligns with ongoing technological advancements but also maintains the highest standards of security.
Upstarts excited at the premise of building out a solution for the RCMP should note that there is a long list of checkboxes required for a solution to be considered. A few of these include,
- “Be able to accept and process transactions for the top 20 cryptocurrency blockchains by market capitalization as detailed on CoinGecko on August 10, 2023″
- “Be scalable to onboard and support new blockchains in the future”
- “Develop a secure process to protect assets in custody ensuring protection of private keys from exploitation resulting in loss of assets”
- “Develop a native android application that can be deployed onto police mobile devices to interact with system”
In total, there are 17 mandatory, and 3 proposed requirements for any proposed solution submitted by companies.
Notably, despite companies like MicroStrategy being routinely referenced when discussing large BTC holdings, one of the world's largest holders is actually the U.S. Government itself as the result of past seizures. While it has auctioned off large batches of BTC in the past, its supply is often buoyed by fresh seizures stemming from criminal activity. As it stands, there is no clear figure as to how much BTC the U.S. government has in its possession, however, past events indicate that the total is in the hundreds of thousands.
The tender notice by the RCMP does not indicate if transparency surrounding seized assets will be afforded to the general public.