Bitcoin News Today: Ex-NCA Officer Sentenced for Stealing Bitcoin Worth 4400% More

A former National Crime Agency officer, Paul Chowles, has been sentenced to five and a half years in prison for stealing Bitcoin during a probe into the Silk Road 2.0 dark web marketplace. Chowles, 42, was convicted for offenses including theft, transferring criminal property, and concealing criminal property. He was part of the UK’s investigation team targeting criminal networks operating on the dark web and was specifically involved in analyzing digital evidence seized from Thomas White, the co-founder of Silk Road 2.0, following his arrest in 2014.

During the investigation, authorities had seized 97 Bitcoin from White’s digital wallet. However, between 6 and 7 May 2017, 50 Bitcoin were transferred from the wallet to a different address. The funds were then routed through Bitcoin Fog, a known crypto mixing service used to obscure transaction trails. At the time of the transfer, the 50 Bitcoins were worth around £59,000. Their value has since risen to over £4.4 million.

For years, the missing Bitcoin was believed to have been moved by White, whose technical knowledge raised suspicion that he could have accessed the wallet. The NCA eventually wrote off the loss as untraceable. The case was reopened in early 2022 after White, who had served a prison sentence, told Merseyside Police that only the NCA had access to the wallet. This triggered a meeting between Merseyside Police and the NCA, attended by Chowles himself. Subsequent investigations by Merseyside Police identified Chowles as the perpetrator. Officers recovered an iPhone linked to a Bitcoin transfer account and browser activity related to a crypto exchange. They also found notebooks in Chowles’ office containing login details and references to White’s crypto accounts.

Chowles had used two crypto-enabled debit cards to spend the funds. He made hundreds of transactions using accounts with Cryptopay and Wirex, spending over £100,000 across both platforms. Per the CPS’s estimates, Chowles had managed to secure more than £613,000 from the ordeal. The National Crime Agency supported the investigation and has since dismissed Chowles from his position.

Silk Road 2.0 was launched in late 2013, less than a month after the FBI shut down the original Silk Road and arrested its founder, Ross Ulbricht. The successor of the infamous darknet marketplace functioned similarly, and facilitated illegal sales of drugs and other contraband before it too was dismantled by authorities in 2014. Thomas White, who created Silk Road 2.0, was sentenced to 64 months in prison in 2019. His arrest and asset seizure formed part of a broader international effort between the NCA and the FBI targeting online black markets.

Following Chowles’ conviction, confiscation proceedings are now underway. Prosecutors described Chowles as a technically skilled officer who had exploited his role for personal gain while attempting to conceal the theft by using crypto laundering tools. The case highlights the challenges faced by authorities in managing and securing digital assets, particularly in high-profile investigations involving cryptocurrencies. As cryptocurrencies continue to gain prominence, it is crucial for agencies to develop and implement effective strategies to safeguard digital assets and ensure the integrity of investigations.