The United States Department of Justice (DOJ) has announced plans to create a new enforcement team that will prioritize combating cyber-enabled crime linked to virtual currencies. This move comes at a time when financial crime involving cryptocurrencies continues to grow and evolve, with the DOJ citing a need to “combat criminality when it intersects with the world of virtual currency.” The new team will be part of the newly created Cyber-Digital Task Force, and is expected to help the DOJ focus their resources on areas of high-priority cybercrime, including those related to virtual currencies.
- 1. US Justice Department Grips Crypto Crime
- 2. New Criminal Enforcement Team Formed
- 3. Focus on Curbing Illicit Cryptocurrency Activity
- 4. Increased Resources to Combat Digital Currency Abuse
1. US Justice Department Grips Crypto Crime
The US Justice Department is increasingly focusing on crypto crimes because of their growing prevalence. According to a recent report from the Department of Justice, investigations related to cryptocurrency-related crime rose 600% between 2017 and 2019, driven largely by the rise in cryptoasset values.
The Department of Justice has been actively working to address these issues. The Cyber Digital Task Force, which is part of the Department of Justice, released a report that focuses on cryptocurrencies and recommended a comprehensive enforcement framework and strategies to combat cyber crime. Additionally, the Department of Justice is prosecuting a number of high profile cryptocurrency-related cases, such as the prosecution of Larry Harmon, who was found guilty of money laundering and operating an unlicensed money transmission business.
The tightening of enforcement surrounds cyber crime and cryptocurrencies should come as no surprise. Cryptocurrency crime is expected to increase by 63% in 2020, according to the Cyber Defense Report, and the US Justice Department is working hard to keep up with the trend. Some of the recommended strategies to combat cyber crime include:
- Improved coordination between the Department of Justice and enforcement agencies
- Increased focus on international collaboration
- Enhanced technology capabilities
- Improved public education about cryptocurrency crime
2. New Criminal Enforcement Team Formed
The local government has recently formed a criminal enforcement team – comprised of law enforcement, legal professionals, and resident advisors – to tackle an increase in criminal activity within the county. The team is an unprecedented step for the area and is expected to be a major contributor to public safety.
Scope of the Team: This new team will be responsible for a wide range of activities related to criminal justice including:
- Coordinating police efforts to apprehend criminals
- Working to educate citizens on public safety
- Building community relations with groups affected by criminal activity
- Assessing risks in the community
- Overseeing prosecutions resulting from criminal investigations
The team is expected to make an immediate impact on crime within the area. Local leaders have expressed their confidence that the team will create positive change and help to make the county a safer place.
3. Focus on Curbing Illicit Cryptocurrency Activity
Governments around the world are increasingly focused on curbing illegal activities involving cryptocurrencies.
The United States has taken a lead on trying to put a stop to malicious activity involving cryptocurrencies, with the Securities and Exchange Commission (SEC) recently imposing a nationwide ban on unregistered crypto exchanges. Meanwhile, the Commodities Futures Trading Commission (CFTC) has also been clamping down on fraudsters offering speculative products that entail high levels of risk.
Apart from clamping down on crypto-related fraudsters, governments are also taking steps to prevent money laundering and the financing of terrorism. Several cryptos have been put on a watchlist due to their potential to be used as tools for money laundering and terrorism financing. Moreover, many governments are setting up regulatory frameworks to monitor and police cryptocurrency exchanges. This is aimed at ensuring the integrity of these operations while preventing any illegal activities.
- US: Securities and Exchange Commission (SEC)
- US: Commodities Futures Trading Commission (CFTC)
- International: Regulatory frameworks for cryptocurrency exchanges
- International: Watchlist of cryptocurrencies
4. Increased Resources to Combat Digital Currency Abuse
The necessity of more effective management
The increase in usage of digital currency as a primary form of payment has made it a target of cyber criminals, particularly those engaged in fraud, money laundering, and other malicious activities. Governments, law enforcement agencies, and financial institutions need to combat this problem by investing in additional resources such as better technologies, improved processes, and more advanced data analytics techniques.
This investment is necessary to create a stronger regulatory framework and ensure compliance with existing laws and regulations. Such a move would enable efficient monitoring, analysis, and reporting of suspicious transactions. This would reduce the chances of criminal misuse of digital currencies and help combat financial crime.
The Benefits of Increased Resources
The use of would bring multiple benefits, including:
- Reduced losses due to digital currency fraud.
- Increased transparency and trust in digital transactions.
- Decreased risk of money laundering activities.
- Improved compliance with anti-money laundering regulations.
- Better detection and prevention of cyber-attacks.
Conclusion
Investment in additional resources is essential to combat digital currency abuse. Increased resources are beneficial not only to law enforcement agencies, but also to financial institutions, digital currency users, and the general public. This will help protect against fraudulent activities and ensure a safer, more compliant digital currency system.
The US Department of Justice’s creation of a specialized task force to enforce cryptocurrency-related criminal activity was seen as a positive development by many members of the cryptocurrency industry. It remains to be seen how the task force will affect crypto crimes in the future, but the fact that the nation’s top law enforcement organization has made it a priority is a welcome sign for digital asset advocates.