Police Departments Voice Frustration Over Rising Difficulties in Combating Cryptocurrency Fraud

Local law enforcement agencies across multiple jurisdictions are increasingly expressing concerns about the complexities involved in investigating and prosecuting cryptocurrency-related scams. Authorities highlight the challenges posed by the pseudonymous nature of blockchain transactions, cross-border jurisdictional issues, and the rapid evolution of fraudulent schemes. Many police departments report lacking specialized training and resources to effectively trace digital asset flows or interact with decentralized networks. The growing sophistication of crypto scammers, who frequently exploit decentralized finance (DeFi) platforms and privacy coins, has created significant obstacles for traditional investigative methods. Some agencies are now calling for enhanced regulatory frameworks, improved interagency cooperation, and dedicated crypto forensic units to address these emerging threats to financial security.

Local Lancaster law enforcement reveals an increase in criminal activities

According to data from the Lincoln Police Department and the Lancaster County Sheriff’s Office, since 2020, people in the area have lost millions to scammers as a result of these scams. The office mentioned that most of the people who had lost funds would likely never see it again. The local law enforcement added that since 2020, it had investigated up to 18 cases related to a form of crypto scam, noting that the scams have seen users lose as much as $156,000.

LSO Chief Deputy Ben Houchin mentioned how hard it is for the victims. “It is very sad. It’s hard to tell them and their reaction is, as you can imagine, devastation,” he said. Meanwhile, the LPD mentioned that they have witnessed multiple victims lose over $1 million to these scammers in the last five years. The police department noted that the highest they have seen within that span is $1.5 million.

LPD Sergeant Steve Wiese mentioned that the scammers use several sophisticated methods to carry out their operations. “I don’t like to give them credit but they are very good at social engineering,” he said. “They can get you to start talking and give them information about you that they’ll use later to manipulate you.” The local law enforcement added that big losses like these happen more frequently than most people think. He added that they fall into the fraud category in their yearly report, with officers from the department responding to about 2,300 calls every year.

Crypto scams are on the rise as institutions call for regulations

According to Wiese, there isn’t a notable difference in scam reports across several years, but the method used by the criminals does. He added that most of these scams range from the usual romance scams to “hey we’ve met before” messages on social media. Local law enforcement also added that most of these criminals try to stay in touch with their victims all the way, noting that most of them talk their victims through the process of taking out money and sending it to them.

Meanwhile, banks around Lincoln have started picking up most of these signs and are moving to help users who may seem in distress or are being coerced to send money. “Our tellers are trained to look out for some red flags that occur. Some of that is paying attention to that transaction and what the member wants, but also paying attention to their attitude when they come in,” Angie Schreiner with Liberty First Credit Union said.

While most times, the funds are gone, regulators mentioned that if the victims speak up on time, they may be able to do something to help them recover the funds. Meanwhile, institutions and local law enforcement have started urging regulators and lawmakers to do something about the menace that is crypto scams, especially via Bitcoin ATMs. According to reports, several counties have now seen an uptick in the number of crimes like these, with scammers always urging their victims to send money via Bitcoin and other gift cards.

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