Phillip Ariss of the Digital Research Unit at the East Midlands Special Operations Unit said fraudsters adopted bitcoin early on and regularly used it to demand payments.
“A year and a half ago, we had very little experience but since then there has been a huge spike in the use of ransomware,” he said during a Fraud Advisory Panel discussion.
“Now every investigation involves cryptocurrencies.”
For example, when the Wannacry ransomware affected computers worldwide in May, victims were asked to pay between $300 (£224.34) and $600 in the digital currency to regain access to their files.
Three months later the hackers removed all bitcoins from the victims’ online wallets.
Ariss said cryptocurrencies facilitated money laundering and that police were just beginning to “scrape the surface”, while the dark web presents further difficulties, because it is all encrypted.
“We are starting to see organised crime adopting cryptocurrencies,” he said.
“They are learning at a faster rate than law enforcement and the lack of technically aware police means that we have to rely on the private sector.”
Ariss said UK regional police had no platform to share cases, which meant a lot of cyber fraud was “hidden in plain sight”.
“We are not trained to recognise what is in front of our faces.”
He added even police officers with cyber experience had to deal with competing time demands at work, so when experts explained cases they had to do so at a basic “entry level”.
“[Cyber Crime] is an ever changing landscape…if we are behind the curve now, it will inevitably get worse,” he said.
“Most of our investigations are reactive. If we find crime, it’s usually because we’ve stumbled across it.”
The legislative environment – including the new EU Anti-money Laundering Directive – was not particularly helpful, as most criminal usage did not occur on law enforcement-friendly exchanges.
Ariss said the police had formed a “very basic” cryptocurrency law enforcement working group to raise awareness of criminal activity and were building a group of expert witnesses. A training path for frontline staff was also being developed.
“Hopefully, this will mean that crimes will be recognised. They will no longer be hidden in plain sight.”