Former National Crime Agency Officer Sentenced for Bitcoin Theft

According to Cointelegraph, a former officer of the National Crime Agency (NCA) has been sentenced to prison for stealing 50 Bitcoin, valued at $5.9 million, which was seized from the co-founder of the defunct online black market Silk Road 2.0. Paul Chowles, an ex-operational officer with the NCA, was part of a team investigating Silk Road and its successor, Silk Road 2.0. On Wednesday, the Crown Prosecution Service announced that Chowles received a five-and-a-half-year prison sentence for theft, transferring criminal property, and concealing criminal property. In May, Chowles admitted to these charges, marking a significant development in the investigation into Silk Road 2.0. Silk Road 2.0 emerged as a successor to the original Silk Road, launching a month after the FBI dismantled the online black market and arrested its founder, Ross Ulbricht, in October 2013. The platform operated for a year before the FBI shut it down. Chowles played a key role in extracting and analyzing data from devices owned by Silk Road 2.0 co-founder Thomas White. The NCA had seized 97 Bitcoin from White during his arrest in November 2014, but 50 BTC, worth approximately $79,000 at the time, were transferred from his wallet in May 2017 to another address. The Bitcoin was subsequently sent through the crypto mixing service Bitcoin Fog, seemingly to obscure its origins. Chainalysis reported that its tools helped trace the funds, revealing that some were converted to cash at exchanges or used on crypto-enabled debit cards, facilitating easier spending. Within the NCA, Paul Chowles was considered competent and knowledgeable about the dark web and cryptocurrencies, according to CPS special crime division specialist prosecutor Alex Johnson. Johnson stated that Chowles exploited his position in the investigation for personal gain, devising a plan he believed would prevent suspicion from falling on him. The CPS noted that the NCA investigation team initially suspected White had accessed his wallet and transferred the Bitcoin, deeming it untraceable. However, White informed police that someone else had moved the Bitcoin, asserting that it had to be someone within the NCA, as they were the only authority with access to his crypto wallet. Merseyside Police officers met with the NCA, including Chowles, to review the investigation of White. This led to a police investigation into the stolen Bitcoin and Chowles' subsequent arrest. During the investigation, police discovered a phone linking Chowles to an account used for Bitcoin transfers, which also contained internet search history for a crypto exchange, according to the CPS. Additionally, several notebooks found in Chowles' office contained usernames, passwords, and statements related to White's cryptocurrency accounts. Chowles used two crypto-enabled debit cards to spend approximately 109,425 British pounds ($146,580), but the CPS calculated his financial gain at around 613,150 British pounds ($821,345). The CPS announced plans to pursue confiscation proceedings against Chowles.