UK police may be ‘ill-equipped to handle crypto crime’ – fraud victim

The UK's National Fraud Intelligence Bureau (NIB) may be ill-equipped to deal with crypto crimes against UK residents, according to a resident who has been a victim of crypto fraud.

The victim, Martin – a British citizen who spoke to Cointelegraph so that his full identity could be redacted – said he lost nearly $46,000 worth to a scammer who acted as a Ledger employee. However, after alerting the NIB of the fraud, the agency allegedly failed to take appropriate action to recover the stolen funds.

@elliptic 1 – Hello. I got a call this morning at 11:06am 28/9/23 from a scammer claiming to be from Ledger, someone tried to steal my money using my recovery phrase, which I never gave.

Unfortunately, they transferred $BTC and $RNDR following their instructions.

— Martin (@martin901109) September 28, 2023

According to Martin, the scammer contacted him by phone on September 28, 2023, claiming to be a representative of Ledger. The fake agent convinced him that a hacker had tried to use his recovery phrase to steal his crypto. Martin was told that his Ledger device would be upgraded to “security level 3” if he took certain steps. But in reality, these steps involved cutting and pasting the fraudster's crypto addresses (sent in text) and verifying transactions to send his crypto to the fraudster.

In the process, the fraudster stole 0.93 bitcoins (BTC) (worth an estimated $40,000 at the time of publication) and 4,000 RNDR ($6,080), Martin said.

After the scammer convinces the victim to transfer crypto to their address, he sends all the funds to Curacao-based gambling platform Roobet, a centralized entity that can freeze the funds. Blockchain transactions show that 1,214.01 RNDR ($1,845) was first sent to Binance and then first exchanged for Ether (ETH) before being transferred to Roobet.

In order to block these funds and prevent them from being withdrawn, Martin needed only the cooperation of Ropet. But when he contacted Robbitt, he was told he could not freeze the money until an official request was made from a local law enforcement agency.

The day after the money was stolen, Martin made a report to the NFIB through the City of London's Action Fraud Reporting Tool. However, according to him, the agency failed to respond to the fraud report until October 17, 2023, almost a month after it was submitted. When he finally answered, he told him: “It has not been possible to identify any lines of inquiry that a law enforcement agency in the UK could pursue.”

Martin also contacted Binance, where a representative told him that the attacker had stolen some funds from the exchange. However, by the time the currency linked it, the currency had already left Binance. The representative stated that Binance is “ready to cooperate” with law enforcement.

After failing to get the money blocked on his own, Martin paid $1,000 out of pocket to run blockchain analytics platform AML Bot's analysis. He hopes a report from the platform will make the police take it seriously. In the year On November 2, 2023, AML Bot released a report stating that yes, indeed, the stolen funds were sent to Roobet.

Martin then updated the report with the City of London Action Fraud Reporting Service. However, as of January 30, the city has yet to respond to the November 3, 2023 update, he said.

Martin provided Cointelegraph with a number of supporting documents to corroborate his story, including what appeared to be the original complaint, NIB emails, Root emails, transcripts of scammers' phone conversations and other evidence.

According to Martin, he may not be the only victim of a crypto scam to have this problem. He pointed out that the reporting form provided by Action Fraud does not have spaces for crypto addresses or hashes of transactions, making it difficult to report these crimes at all. In his complaint, he overcame this problem by inserting the addresses into the spaces intended to be used for the suspect's profile.

Martin is not the only UK resident to complain about the lack of fraud policing. An April 2019 report found that UK police forces were providing “inconsistent” policing of fraud claims. Another report suggests that fraud cases receive only 2% of police funding, despite accounting for 40% of all crimes.

Cointelegraph reached out to NBB for comment but did not receive a response at the time of publication.

Related: Metaverse tools could improve crime scene analysis and law enforcement.