Bitcoin and encryption raise the stakes in high-tech race between criminals and police

Whether it was gangsters a century ago speeding off in faster getaway cars or terrorists and hackers in recent decades who shielded their communications through encrypted apps, criminals have perennially exploited technology to stay a step ahead of law enforcement.

The U.S. Federal Bureau of Investigation struck back in the past week with a pair of victories: a seizure of most of the US$4-million ransom in bitcoin that Russian hackers extorted from a U.S. pipeline operator and the announcement of a years-long sting in which thousands of suspects were duped into using a messaging app secretly controlled by authorities. More than 800 people were arrested in more than a dozen countries.

The breakthroughs came in part because law enforcement officials learned how to leverage two rapidly advancing technologies – encryption and cryptocurrencies – that had previously been a boon for criminals.

Yet the events did little to fundamentally alter the challenges for authorities in an increasingly digital world, according to former law enforcement officials, prosecutors, historians and technology experts. The global sting is highly unlikely to keep criminals from using encryption and could encourage them to go even further underground, experts said. And while the FBI has shown that it can recover stolen cryptocurrencies, doing so requires resources beyond the reach of most law enforcement agencies.

Ultimately, the cases were the latest iteration in the decadeslong back and forth between lawbreakers and the FBI in which both sides have seized on technological advances, whether it is criminals hiding behind encryption or investigators exploiting facial recognition, drones and other mechanisms.

“You get a sharper sword; they get a stronger shield. The greed of the bad guys is always stronger than the reach of the good guys,” said Tim Weiner, author of Enemies: A History of the FBI. “That’s not just the story of the FBI; it’s been true throughout the history of warfare.”

Now, law enforcement agencies are seeking more access to digital devices, sometimes buying private-sector hacking tools and urging lawmakers to give them more power to track suspects.

“This does not end the debate on encryption,” said Joseph DeMarco, a former federal prosecutor who has spent years working on cybercrime. “It shows that law enforcement is willing to design flanking manoeuvres to go around encryption obstacles. But the debate about whether or not those workarounds are adequate will continue.”

Technology has not been all bad for the police. Beyond facial recognition and drones, U.S. authorities use gunshot detectors and devices that simulate cell towers to surreptitiously connect to suspects’ phones and determine their location.

Law enforcement also has an advantage when it gets hold of digital devices. Despite claims from Apple, Google and even the U.S. Justice Department that smartphones are largely impenetrable, thousands of law enforcement agencies have tools that can infiltrate the latest phones to extract data.

“Police today are facing a situation of an explosion of data,” said Yossi Carmil, 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 solutions are there. There is no real challenge to accessing the data.”

From January, 2013, through June, 2020, Apple said, it turned over the contents of tens of thousands of iCloud accounts to U.S. law enforcement in 13,371 cases.

And 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 Schiff, now the chair of the House intelligence committee. The subpoena was part of an investigation by the Trump administration into leaks of classified information.

Yet intercepting communications has remained a troublesome problem for the police. While criminals used to talk over channels that were relatively simple to tap – such as phones, emails and basic text messages – most now use encrypted messengers, which are not.

Two of the world’s most popular messaging services, Apple’s iMessage and Facebook’s WhatsApp, use end-to-end encryption, meaning only the sender and receiver can see the messages. Not even the companies have access to their contents, allowing Apple and Facebook to argue they cannot turn them over to law enforcement.

Authorities’ frustration has prompted them to target smaller encrypted apps favoured by criminals. In July, police in Europe said they hacked into one called EncroChat, leading to hundreds of arrests.

That pushed many criminals onto a new service, Anom. They had to buy specialized phones with few working features, aside from an app disguised as a calculator. With a code, it would turn into a messaging app, Anom, that claimed to be encrypted.

In fact, the FBI created Anom. The bureau and the Australian police started the operation by persuading an informant to distribute the devices to criminal networks, after whichtheycaught on by word of mouth. After three years, Anom had more than 12,000 users.

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. And when authorities obtained court approval to surveil any Anom users, they could easily monitor their messages. But when police carried out hundreds of arrests and detailed the scheme to news cameras last week, the ruse was over.