The United States Postal Inspection Service (USPIS) has asked the agency to conduct a cryptocurrency training program. The audit focused on how the agency handles investigations that relate to cryptocurrency. As a result, it discovered a significant gap for improvement by the agency in its dealings.
The audit covered some crypto-related cases for two years, 2019 and 2020. It revealed that there were four closed cases that the agency seized digital assets as investigation evidence. Also, there are nine other cases under the supervision of the USPIS “Cryptocurrency Fund Program.”
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The program runs to specify policies and standards that will provide accountability during investigations for crypto transactions. Such a procedure will lower the operational risks of the agency.
The audit report further stressed the importance of the program based on the anonymous nature of crypto transactions. Also, it considered the volatility in crypto value, which can create a loop for theft or abuse if utilized for law enforcement activities.
Not minding the few crypto-related cases, the USPIS Office of Inspector General (OIG) took a definite stand earlier in the year.
The OIG ensured that a self-initiated audit is essential to understand that digital assets can be the accepted exchange medium for illegal transactions. Some of such activities include money laundering, online scams, and ransomware campaigns.
Discoveries From The Audit
The audit report for the operational activities under the two fiscal years highlighted the absence of standard training for the USPIS staff on cryptocurrency.
This implies that USPIS inspectors involved in undercover investigations and even bought digital assets made mistakes. As a result, there is a complete failure in compliance with the directives inculcated in the Cryptocurrency Fund Program.
However, there are situations that the inspectors used the program regarding their crypto transactions for investigative purposes. But the audit shows many legal instances where it may be impossible to use the program. One of such situations is when a crypto vendor supports payments with specific private digital assets.
Such situations demand that inspectors are to request standard investigative funds, usually U.S. dollars. Also, they will be responsible for the crypto-fiat conversions as well as manage the unutilized investigative funds.
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The audit picked a communication gap between the inspector and management from these situations. This implies that the program’s managers can’t provide details for the total crypto amount for investigative purposes in the agency.
The auditors had to devise a means to uncover whether or not crypto was used for some investigative cases.
This prompted them to conduct a manual keyword search for some crypto-related terms. This led to the discovery of 1,064 cases that require manual review. Thus, the audit report confirmed the inability of the program in fulfilling its primary purposes.
Cryptocurrency Volatility Becomes A Challenge
This lies in providing the right assistance to inspectors in walking through the challenges of cryptocurrency volatility. The report mentioned that such failure makes the agency susceptible to theft, mismanagement of federal funds, and abuse.
According to the report’s future recommendations, the USPIS should ensure that the program has the necessary information. Also, the agency should give comprehensive crypto training for all inspectors.
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Furthermore, there should be a complete rehauling of the data management used in investigative transactions. This will sieve out inaccurate or duplicate data and create the right energy for the agency in handling crypto-related activities.
The deputy assistant inspector general in the OIG, Margaret McDavid, revealed the involvement of USPIS in the 2019 dismantling of the Wall Street Dark Web Marketplace. She said that this resulted in the seizure of more than $25 million worth of digital assets.
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