The U.S. Postal Inspection Service (USPIS), the law enforcement arm of the U.S. Postal Service (USPS), is re-thinking the way it handles crypto-related investigations.
The audit was led by Mary Lloyd, the agency’s cybersecurity and technology expert. It found a “lack of standardized [cryptocurrency] training” for postal inspectors and inconsistent communication between inspectors and the Cryptocurrency Fund Program, a body created in 2017 to serve as the custodian for the postal service’s crypto wallet and to generally oversee its crypto operations.
Additionally, accounting software used by USPIS to track transfers of cryptocurrencies during investigations was found to have “data integrity issues,” including duplicate transactions, that resulted in inaccurate records.
Because cryptocurrency provides a layer of pseudonymity for illegal online transactions, often through dark web marketplaces, the USPIS and other law enforcement agencies have had to develop undercover crypto investigation procedures. Some of those methods have succeeded more than others.
Lloyd’s report said USPIS should develop a “comprehensive cryptocurrency training program” for its inspectors, “develop written procedures for the management and oversight of the national wallet,” fix the accounting system and improve communication between inspectors and the Cryptocurrency Fund Program.
The audit, which was announced in March, was self-directed. It was the first time the USPS has formally examined the topic of cryptocurrencies, according to a report from Nextgov, a publication that covers technology issues in the government.
The report also revealed the relatively small scope of the USPIS’ crypto investigations: In 2019 and 2020, the Cryptocurrency Fund Program received only nine requests for crypto for investigative purposes, and the postal inspectors seized crypto assets in only four cases.
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