New Zealand police lose $45,000 in Bitcoin during sting operation

Criminals stole $45,000 in cryptocurrency from the New Zealand Police’s Bitcoin wallet during the operation against them, the New Zealand Herald reports.

Law enforcement had been conducting an online investigation into money laundering, but ultimately lost the funds.

In connection with the theft, the agency opened a criminal case and carried out two internal investigations.

According to Detective-Inspector Stuart Mills, those responsible for the theft were probably abroad, and the crime was part of a broader fraud targeting Bitcoin wallets.

The internal investigation found no procedural violations by staff during the operation. Detective-Inspector Christian Barnard, who led it from the police’s Financial Intelligence Unit, offered several recommendations to improve processes.

The cryptocurrency was purchased by the authorities in 2020, and it was intended for a ‘controlled purchase’—a sting operation in which police attempt to buy illegal goods or services.

BitPrime founder Ross Carter-Brown commented on the news of the loss of assets with the words:

That’s pretty wild.

He noted that access to the Bitcoin wallet can be obtained by having the private key or seed phrase. Carter-Brown said it was unlikely that detectives would voluntarily disclose the data to the criminals, or that the latter would gain access through the police network.

In his view, the most plausible scenario is that the controlled purchase went off the rails, and those whom the police were trying to lure into a trap vanished with the cryptocurrency, having provided no goods or services. If the detectives carried out their part of the deal by sending the funds, they could no longer cancel the Bitcoin transaction, Carter-Brown said.

Earlier, British police were more successful in the money-laundering investigation, изъяв рекордную для страны сумму in cryptocurrency worth about $158 million.