Arkansas Sheriff’s Office Starts Mining Bitcoin to Buy Child Porn and Drugs

sheriff mining bitcoinNWA Democrat-Gazette/CHARLIE KAIJO Detective Olin Rankin and Detective Keith Eoff work out of their office in the cybercrime division on Friday, October 27, 2017 at the Benton County Sheriff's office in Bentonville. The Benton County Sheriff's Office hopes mining for Bitcoins will help detectives catch criminals on the dark web. It's a way of getting the digital currency. The cybercrime division can then use it for undercover operations in various capacities online.

A Sheriff’s Office in Arkansas has decided to get into Bitcoin mining, for the purposes of using the bitcoins they mine in undercover investigations into crime on darknet marketplaces. The logic behind the mining project appears to make little sense. Recently Sheriff Shawn Holloway of the Benton County Sheriff’s Office announced that the Sheriff’s Deputies and Detectives in the Sheriff’s Office’s Cyber Crimes Division have begun mining Bitcoin and storing them on one specific Bitcoin wallet. Sheriff Holloway told reporters from local TV station 40/29 News that the Bitcoin mined by the Sheriff’s Cyber Crimes Division will be used to go after people trading child pornography as well as people committing other crimes on the darknet. Child pornography is a global epidemic, especially on darknet market child pornography.

“People are selling child pornography on the dark web and on the internet. They are accepting bitcoins, not payments [sic]. We can’t use the sheriff’s office credit card, and we can’t exchange child pornography. We need some type of currency to get this and then identify who we are getting it from. That way, we can go arrest that person,” Detective David Undiano of the Benton County Sheriff’s Office’s Cyber Crimes Division told reporters with 40/29 News. Detective Undiano told reporters that the Cyber Crimes Division was mining Bitcoin because it was “cheaper” than buying or trading Bitcoin on an exchange and that the freshly mined Bitcoin is harder to trace. It is true that newly mined Bitcoin is more private and pseudonymous, as there are no previous transactions to connect with the coin and there is no record of purchase unlike when buying on an exchange.

Detective Olin Rankin with the Benton County Sheriff’s Office’s Cyber Crimes Division told a reporter with Arkansas Online that the Cyber Crimes Division did not decide to acquire Bitcoin through mining for the purposes of avoiding being tracked, as Rankin says average Bitcoin users are not able to track where coins come from. Detective Rankin said that the Cyber Crimes Division is mining Bitcoin using a mining pool, instead of doing solo mining. The mining is done on one machine that the Sheriff’s Office is running at a data center that they are already using. According to Detective Rankin, the Cyber Crimes Division attempted to identify other miners who were in the mining pool but were unable to. Rankin believes that his inability to unmask the other miners in the pools demonstrates the security and privacy the Sheriff’s Office will enjoy as miners in the mining pool as well.

According to Detective David Undiano, the Sheriff’s Office started its Bitcoin mining operation back in April. The Bitcoin that the Sheriff’s Office mines through the mining pool is then transferred to and stored in a hardware wallet. The detectives say that they are consulting with experts to determine how many coins they will need to conduct undercover investigations. The Cyber Crimes Division is working on a written policy for how the Bitcoin will be used, and the Sheriff’s Office is working with the federal government and other law enforcement agencies outside of its jurisdiction to assist in cases involving the darknet. The Sheriff’s Office claims they want to be transparent, but also don’t want to reveal too much information about their darknet investigations.

A former law enforcement officer who plans to challenge Sheriff Holloway in next year’s election is skeptical of the Benton County Sheriff’s Office’s Bitcoin mining operation and undercover darknet investigations. “These machines that they have to use draw a huge amount of power, and cooling costs will go up. That’s at the taxpayers’ expense,” Latham said. “If they can prove that it is cost-effective, OK, fine. But every taxpayer has the right to know what is going on,” the former law enforcement officer, Glenn Latham, told Arkansas Online. Latham continued, saying, “No question whatsoever that those activities are happening, and criminals are using bitcoin. The problem with it is the anonymity behind the Tor network and the expense we will go through to reach a dead end. There are easier ways of catching people who are actively hunting children.”

Last month the detectives from the Benton County Sheriff’s Office’s Cyber Crimes Division held a two hour Parents Night Out presentation. The presentation was meant to help keep kids safe online, but ironically children were prohibited from attending the meeting. According to local news organizations, the presentation included information on the darknet and how to access the deep web.

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