Canada to Set up Storage for Seized Digital Assets

As cybercrimes rise in the country, Canada challenges local developers to create a secure repository for seized cryptocurrencies and NFTs. 

Challenge for Creating a Digital Asset Repository

Due to a reported rise in crypto-related illegal activities across the country, the Royal Canadian Mounted Police (RCMP) and Shared Services Canada (SSC) are pursuing a solution that can facilitate the seizure and storage of digital assets such as cryptocurrencies and non-fungible tokens (NFTs) on various blockchains, according to the statement of August 10, 2023. 

“The RCMP requires the ability to safely and securely store digital assets that have been seized and retained, until their eventual disposition at the conclusion of any legal proceedings. The development of a centralized repository solution would allow police officers to seize these assets in a user friendly manner, while also offering significant security to prevent the theft of said assets during their storage,” reads the statement.

The authorities dare the Canadian innovative developers to come up with a safe digital asset repository that would help the police seize and safeguard stolen assets, in an effort to decrease cryptocurrency frauds. 

The RCMP outlines fourteen mandatory and three desirable features a proposed solution should have. The primary considerations require the repository to be able to accept and process transactions on the top 20 cryptocurrency networks by market capitalization, as well as onboard and support new blockchains in the future.

Other demands on the list include a native Android application; secure processes to protect assets and dispose of them if needed; daily automated verification and notifications on asset transfers; clear instructions on seizing assets for officers; and more. The RCMP also listed three NFT blockchains that must be supported by the system at this stage – Ethereum, Solana, and Polygon. 

Participants of the challenge can submit their idea until September 21, 2023. Up to four contracts for Phase 1 could result from the challenge. Then, only two eligible businesses will be invited to submit a proposal for Phase 2. 

Combatting Cryptocurrency-Related Crimes

The main reason behind the development of the digital asset repository is the surge of crypto-related activities in Canada:

“With the rise of new and innovative methods to store and transfer assets, Canadian Law enforcement needs a safe and secure method to identify and seize said assets. As cryptocurrency continues to gain popularity as a transaction method and store of value in the general population, it continues to be used as a payment method for criminal activities. With ransomware/malware attacks and online scams making up the majority of these transactions. This challenge aims to leverage the private sectors innovation to develop a system used by the police to seize and store the ill-gotten gains from these criminal activities.”

It’s important to note that Canada is not the only country that experiences a rise in crimes linked to digital assets. For example, the FBI in the US has also recently reported numerous scams related to cryptocurrencies and NFTs, with one of the recent cases resulting in the loss of staggering $9million. 

Besides, other countries are also looking for effective ways to deal with crypto crimes. One of the latest examples is a multi-agency investigation unit established by South Korea.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.