Justice Officials Release Framework for Policing Crime in Crypto Space

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Complimenting the new national digital asset framework, law enforcement is planning similar steps to combat crime in the crypto marketplace. 

Following the Biden administration’s release of the inaugural framework to better regulate and understand cryptocurrency and digital assets within the U.S. economy, the Department of Justice issued its own guidance on navigating the volatile market safely. 

A new document titled “The Role of Law Enforcement in Detecting, Investigating and Prosecuting Criminal Activity Related To Digital Assets” was released to the public on Friday following its initial submission to President Joe Biden. It clarifies how law enforcement agencies should work to police the fraud permeating the heretofore unregulated market. 

“As digital assets play a growing role in our global financial system, we must work in tandem with departments and agencies across government to prevent and disrupt the exploitation of these technologies to facilitate crime and undermine our national security,” said Attorney General Merrick Garland. “The efforts announced today reflect the commitment of the Justice Department and our law enforcement and regulatory partners to advancing the responsible development of digital assets, protecting the public from criminal actors in this ecosystem and meeting the unique challenges these technologies pose.” 

Leadership at Justice helped contribute to the new national digital asset framework, pursuant to Biden’s previous executive order instructing a multiagency approach to setting new regulations for crypto assets.  

New initiatives to counter crime in the digital asset space include having Justice’s new National Cryptocurrency Enforcement Team to litigate crimes in decentralized finance and sharpen the investigation and prosecution in these cases. 

Justice’s report breaks down three categories of illicit uses of digital assets: using cryptocurrency as a means of payment to finance criminal activity, using digital assets to conceal illegal activity and deliberately undermining the digital asset marketplace with transactions. 

It also makes the case for stronger customer-identification efforts amid emerging technology that makes it more challenging to police crime in the digital asset ecosystem. Echoing the national framework, Justice’s report offers regulations and amendments to the Bank Secrecy Act that would aid law enforcement’s regulatory efforts to safeguard crypto asset transactions.

“The emerging technologies and markets associated with the rise of digital assets

have created new opportunities for criminal actors to harm individual victims, avoid regulation, evade economic sanctions, raise funds for terrorist activities and launder illgotten gains,” the report concludes. “Although the Department is dedicated to and adept at addressing technologically advanced criminal activity, substantial budgetary, legislative and regulatory efforts will be required to keep pace with, and protect victims from the abuse of, rapidly changing technology in the digital assets space.”