The US Department of Justice has contacted more than 150 federal prosecutors across the country to strengthen law enforcement efforts to combat the rise in crime linked to the use of cryptocurrencies such as bitcoin, officials said.
The Digital Asset Coordinators Network is intended to designate subject matter experts in U.S. attorneys’ offices on the complex technical and legal complications posed by cryptocurrency cases, the officials said. The Biden administration is announcing the new effort Friday along with the release of a broader set of frameworks from other agencies regarding regulatory approaches to developing the digital currency ecosystem.
The network was motivated in part because of the high degree of technical expertise that can go into prosecuting cryptocurrency cases, as well as the growing popularity of digital currencies across several different crime areas, said Eun Young Choi, the first director of the Justice Department’s National Cryptocurrency Enforcement Team . These areas of crime include money laundering or terrorist financing, a means of payment for ransomware hackers and a direct target for theft, she added.
But law enforcement work extends beyond bringing charges and making arrests. They have also been increasingly dedicated to disrupting criminals using technical means – which may rely on the cooperation of cryptocurrency exchanges – and seizing stolen cryptocurrency. For example, U.S. authorities seized more than $30 million in cryptocurrency looted from an online game this year by hackers linked to North Korea, one of the biggest successes in recovering digital proceeds from Pyongyang, the Journal reported earlier this month.
Also on Friday, the Justice Department released a report proposing potential regulatory and legislative actions that it determined could strengthen law enforcement’s capacity to gather evidence and initiate prosecutions related to cryptocurrency criminal activity.
Among other priorities, the report called for expanding existing laws that prevent employees of financial institutions from tipping off suspects to ongoing investigations to include digital asset service providers. The report, which was required under a previous executive order by President Biden, also called for strengthening a law criminalizing the operation of unlicensed money transmitting businesses and extending some relevant statutes of limitations to take into account the complexities posed by cryptocurrency investigations.
Such steps would likely require new legislation from Congress rather than executive action from the president, Choi said.
The Biden administration also released a number of other reports on cryptocurrencies as part of the executive order on Friday. To protect consumers, the administration recommends that regulatory agencies such as the Securities and Exchange Commission use existing authorities to regulate the sector and coordinate closely with other regulators.
“As we have seen in recent months, the risks stemming from inappropriate behavior related to the trading of cryptoassets continue to be a particularly serious area of concern. This includes fraud, theft and fraud,” said Treasury Secretary Janet Yellen. “We recommend that agencies continue to strictly follow its enforcement action with a focus on the crypto-asset sector.”
As the Journal previously reported, the Biden administration will continue to study the feasibility and practicalities of creating a digital dollar.
An extended version of this story appears at WSJ.com.
