A customer uses his mobile phone to pay with bitcoin at a coffee shop in the center of Athens, Greece, Feb. 25, 2018. Greece's bitcoin community grows in recent years, buoyed by the capital controls imposed on the traditional banking system since the summer of 2015, users and investors told Xinhua, although local authorities warn about the risks of crypto currencies. (Xinhua/Lefteris Partsalis).

Under the headline "Scammers in Paris," an online sleuth known as ZachXBT published a blog in August detailing how a pair of youngsters stole cryptoassets worth millions.

Much to his surprise, the French police announced last week that they had acted on his tipoff and charged five people.

It was the first time his sleuthing had led to police action, ZachXBT told AFP, despite having investigated $250 million worth of crypto scams and thefts and chronicling them for his 300,000 Twitter followers.

One explanation for the lack of action is that low-level scams are not a priority.

The authorities in the EU and the US, the leaders on crypto control, have relentlessly focused on aspects of crypto crime related to terrorist financing, money laundering and sanctions busting.

Arrests have been rare at federal level in the US, the Department of Justice's specialized unit charged only eight suspects in the first half of 2022.

US federal agencies have often concentrated on headline-grabbing suspects like Heather Morgan, an amateur rapper nicknamed "Razzlekhan" who was charged with money laundering in February, and more recently reality TV star Kim Kardashian, who was fined in September for illegally promoting a cryptocurrency.

Yet the specialist crypto firm Chainalysis said more than $3.5 billion had been lost to scams and hacks between January and July.

The sheer scale of the criminality proves difficult for law enforcement agencies already lacking resources for financial crime.

Chainalysis is one of several firms rushing to fill the gap in expertise, selling its tools and services to agencies including the New York police. Former New York police chief Terry Monahan told a recent Chainalysis event that before he stepped down in 2021 officers would face three cryptocurrency cases every day. But they had no way of investigating, so the cases would be closed.

"The victim was left with nowhere else to go," he said, pointing out that federal agencies were only interested in cases worth millions.

AFP