Law enforcement Oct 15, 2020

The U.S. Department of Justice Unveils Plan to Fight Crypto Criminals

The U.S. Department of Justice and Attorney General William Barr have released…

The U.S. Department of Justice (DOJ) and Attorney General William Barr have announced the unveiling of a crypto enforcement framework that was built around the Attorney General’s Cyber-Digital Task Force to combat the crypto-enabled cybercriminal enterprises that have targeted citizens and organizations for years.

The Cyber-Digital Task Force was created to focus on investigations relating to the emerging threats and challenges in law enforcement as far as cryptocurrency adoption and use is concerned.

The 83-Page Framework

The 83-page framework document elucidates the strategies that are set to be employed by DOJ and U.S. law enforcement in fighting all forms of crimes relating to blockchain and digital currencies.

The plan has been divided into three main parts – the first section provides a clear outline of the role of blockchain and crypto technologies in modern economic life, including their involvement in small contracts, digital wallets, initial coin offerings (ICOs), and the transfer of virtual coins between different entities.

Illicit Crypto Applications

The report unpacks the modern avenues for illicit cryptocurrency applications by dividing them into three main classes: monetary exchange that is related to criminal activities, the practice of money laundering and various forms of tax evasion, including apparent financial theft.

The framework reports the widely-known truth about the role that has since played by cryptocurrencies to facilitate the occurrence of international organized crime and terrorist financing.

In particular, the report says that the criminal preference for cryptocurrency is pegged on the fact that digital assets go a long way in providing an alternative to cumbersome huge cash transactions that would otherwise be witnessed in the context of fiat currencies.

In addition, the risk of law enforcement agencies tracing criminal financial activity becomes significantly mitigated by the use of highly anonymous transactions and digital coins. Criminals can easily move large sums of money across international borders to fund illicit investments such as child exploitation and terrorist rackets.

At a high level, the crypto-centric dark web markets have come in handy for criminal elements looking to purchase drugs, weapons and cyber tools to hack organizational and individual computer systems through ransomware packages.

Legal and Regulatory Tools to Fight Crypto Crime

The second section highlights some of the currently-existing legal and regulatory mechanisms that are used by the authorities to target all crypto-enabled criminal activity.

Among the methodologies used by law enforcement agencies and the justice system include the imposition of a number of charges that can be used to pin down crypto criminals. They include wire fraud, securities fraud, money laundering, the unauthorized access to victim computer systems, and involvement in the unlicensed transfer of money.

Importantly, law enforcement agencies and justice departments can use the power vested in them to confiscate cryptocurrency and seize website domains believed to be facilitators of crypto criminal activity.

Challenges in Crypto Enforcement and Regulation

Third, the document reports on the present and future challenges that are bound to arise as forms of crypto criminal resistance to regulatory and law enforcement interventions across the digital asset industry.

Thus, regulatory bodies have made it mandatory for crypto stakeholders to adhere to specific sets of rules, such as the AML/KYC guidelines for exchanges, in compliance to laid-out steps towards flushing out the criminal elements hiding behind the cryptocurrencies.

The framework acknowledges the potential for crypto-related entities in facilitating international crime, and has prescribed a number of recommendations to ensure that regulators and law enforcement agencies work hand in hand with such establishments to investigate crypto crime.

In the end, a win-win situation will be created when crypto entities, including legitimate businesses such as Bitcoin ATMs and crypto casinos, protect their platforms and enterprises from exploitation by threat actors who may otherwise intend to steal and sell their customers’ data.

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