Former National Crime Agency officer jailed for over 5 years for stealing bitcoin now worth $5.9 million

Paul Chowles, a former UK National Crime Agency officer, was jailed for five years and six months at Liverpool Crown Court on Wednesday after stealing 50 BTC — now valued at around £4.4 million ($5.9 million) — from seized criminal assets, following an investigation by Merseyside Police.

The NCA fully cooperated with the investigation into its former employee, who was dismissed for gross misconduct after his actions came to light. Chowles, 42, from Bristol, worked on a joint NCA-FBI operation that dismantled several UK-based dark web criminals, including the conviction of Thomas White of Liverpool in April 2019, who is also serving more than five years in jail. Chowles was the NCA analyst responsible for handling NCA-seized cryptocurrency. 

In May 2017, 50 BTC of the 97 BTC confiscated assets during the probe into White were stolen by Chowles and split into smaller amounts before being transferred to other public addresses in an effort to conceal the money trail. He later converted some of the funds into pound sterling, withdrawing the cash or using debit cards to spend the proceeds, the police said, and was arrested in May 2022, estimating his total criminal gain at more than £613,147 ($821,935). 

"This case should illustrate in the starkest terms that nobody is above the law," Detective Chief Inspector John Black, from Merseyside Police's Force Intelligence Bureau, said in a statement. "When it became clear that one of the NCA's own officers had stolen bitcoin, our officers conducted extensive enquiries to unearth a trail of evidence that Chowles had attempted to hide."

How we got here

In March, the UK's Crown Prosecution Service authorized Merseyside Police to charge Chowles, 42, from Bristol, with 11 offenses of concealing, disguising, or converting criminal property, three offenses of acquiring, using, or possessing criminal property, and a single count of theft.

Chowles subsequently pleaded guilty to theft, transferring criminal property, and concealing criminal property in May, Merseyside Police said. 

The CPS is the principal public agency for prosecuting criminal cases in England and Wales, responsible for reviewing evidence collected by the police and other law enforcement agencies and deciding whether to bring charges against individuals. Its Special Crime Division deals with some of the most complex and sensitive cases.

The NCA is a law enforcement agency that tackles serious and organized crime across the UK. Sometimes informally referred to as the "British FBI," it works to disrupt criminal networks involved in drug trafficking, cybercrime, human trafficking, money laundering, fraud, and child exploitation.

How Chainalysis helped uncover the theft

Onchain investigation firm Chainalysis played a key role in uncovering the theft by providing advanced blockchain analytics and expert support to trace the stolen 50 BTC despite it being laundered through the mixing service Bitcoin Fog. 

With Chainalysis's assistance, investigators linked the transactions to Chowles, identified exchanges where funds were cashed out, and documented the full flow of assets. Chainalysis's evidence was instrumental in proving Chowles's guilt, helping Merseyside Police to recover bitcoin then worth over $1.3 million in 2022, and demonstrating how blockchain's transparency can expose even sophisticated financial crimes, the firm said in a blog post.

Chainalysis's blockchain visualization tool, Reactor, showing the flow of funds through five key stages.

Stolen bitcoin now worth $5.9 million

While the 50 BTC was worth just £60,000 ($77,400) at the time of the alleged theft, the substantial rise in the value of the foremost cryptocurrency in the intervening years means those funds are now worth around £4.4 million ($5.9 million). 

In April 2024, the UK government granted greater powers for the NCA and police to seize, freeze, and destroy crypto assets used by criminals without making an arrest. "These reforms are bad news for criminals, they send a clear message we will never let crime pay," former Security Minister Tom Tugendhat said at the time.