On Wednesday, October 6, 201, the US Department of Justice announced that it had created a crypto enforcement team. The team will be called the National Cryptocurrency Enforcement Team (NCET).
The Purpose of the Team
According to the DoJ, this team will focus on tackling complex prosecutions and investigations that involve criminal misuse of cryptocurrency. It will focus on crimes involving cryptocurrency exchanges, tumbling and mixing services, and actors involved in the infrastructure that facilitates crypto-based money laundering.
This team will operate under the office of Assistant Attorney General Kenneth A. Polite Jr. It combines expertise in the DoJ Criminal Division’s Computer Crime and Intellectual Property Section (CCIPS), Money Laundering, and Asset Recovery Section (MLARS), and other sections of the division. Additionally, the enforcement team will work to trace and recover assets lost via fraud and extortion, including those payments received via ransomware attacks.
The DoJ’s goal is to provide it, and other government agencies with the expertise to deal with crypto and blockchain-related crime. In recent years, the number of ransomware attacks has grown, and it caught even major companies flatfooted.
Challenges of Regulating Crypto
One of the challenges that face the crypto industry is regulation. Thus far, no law at the federal level regulates the US crypto industry. Instead, various government agencies such as the SEC, deal with crypto assets on a case-by-case basis. On August 3, 2021, the Chair of SEC, Gary Gensler, stated that he agreed with his predecessor Jay Clayton who stated,
“To the extent that digital assets like [initial coin offerings, or ICOs] are securities — and I believe every ICO I have seen is a security — we have jurisdiction, and our federal securities laws apply.”
However, there is still a lack of clarity despite numerous pronouncements on the issue by the SEC. Even reputable firms in the crypto sector can find themselves in trouble. For instance, Coinbase, a leading crypto exchange in the US, announced it was canceling its Lend program due to conflict with the SEC. They did so despite having worked closely with the SEC before they announced the launch.
Real-World Impact of Ransomware Attacks
The hope is that NCET can provide the whole department and other government agencies with the expertise in cryptocurrency and blockchain needed to investigate and prosecute the growing number of cases related to the technology today. There’s been a rise in cybercrime cases these past years, including ransomware attacks wherein bad actors target companies across industries to hold their networks hostage in exchange for payment via cryptocurrency.
These attacks have had a major impact on people. For instance, a ransomware attack on Colonial Pipeline, saw the company shell out 75 BTC valued at over $4 million to the hackers. It was a huge attack since the company delivers about 45% of all gasoline consumed on the East Coast. Due to the attack, the company stopped fuel supplies for almost a week, which led to gas shortages all over the East Coast from Florida to Washington DC. However, the DoJ later managed to recover most of the BTC paid out to the hackers.
What the Leadership Team Had to Say
Commenting on the creation of the team, Lisa O. Monaco, the Deputy Attorney General, said
“Today we are launching the National Cryptocurrency Enforcement Team to draw on the Department’s cyber and money laundering expertise to strengthen our capacity to dismantle the financial entities that enable criminal actors to flourish — and quite frankly to profit — from abusing cryptocurrency platforms. As the technology advances, so too must the Department evolve with it so that we’re poised to root out abuse on these platforms and ensure user confidence in these systems.”
Notice: Information contained herein is not and should not be construed as an offer, solicitation, or recommendation to buy or sell securities. The information has been obtained from sources we believe to be reliable; however, no guarantee is made or implied with respect to its accuracy, timeliness, or completeness. Authors may own the cryptocurrency they discuss. The information and content are subject to change without notice. Visionary Financial and its affiliates do not provide investment, tax, legal, or accounting advice.
This material has been prepared for informational purposes only and is the opinion of the author, and is not intended to provide, and should not be relied on for, investment, tax, legal, accounting advice. You should consult your own investment, tax, legal, and accounting advisors before engaging in any transaction. All content published by Visionary Financial is not an endorsement whatsoever. Visionary Financial was not compensated to submit this article Please also visit our Privacy policy; disclaimer; and terms and conditions page for further information.