Department of Justice cracks down on Cryptocurrency Crime – Cryptocurrency Enforcement Unit

In October 2021, the United States Department of Justice created a specialized task force to investigate crimes related to cryptocurrency. The task force, known as the National Cryptocurrency Enforcement Team (NCET) will handle all crimes committed using virtual currency exchanges, mixing services, and laundering services. This team is the next step in the United States battle against digital criminals utilizing unregulated digital currencies such as Bitcoin.

Cryptocurrencies are implicated in a wide variety of criminal activities, such as electricity theft during the mining phase, tax evasion, fraud and theft, money laundering, the sale of illegal goods, and more. Last month, the treasury department issued sanctions against a cryptocurrency exchange for the first time, after the exchange failed to meet minimum standards against ransomware attacks.

The DoJ states the NCET will be made up of blockchain and cryptocurrency experts charged with aiding the Justice Department in investigating and charging digital criminals. Deputy Attorney General Lisa Monaco stated NCET would build upon “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.”

What does this Change?

The NCET was created to “assist in tracing and recovering assets lost to fraud and extortion, including cryptocurrency payments to ransomware groups,” and to investigate and pursue its own cases involving crypto-related criminal activity. This gives the task force broad jurisdiction to investigate many cases. However, cases of this type have been notoriously difficult for the Department of Justice to prosecute, and it is unclear what techniques the NCET will utilize to increase convictions. Users should expect an uptick in crypto-related prosecutions while NCET establishes itself.

During its early days, cryptocurrencies were largely unregulated and unsupervised by the U.S. government. The induction of the NCET likely signifies the end of cryptocurrency’s “wild west” era. This means that those active in the cryptocurrency industry will need to ensure their services meet relevant trading standards and practices. Cryptocurrency firms should be ready to respond to NCET demands for information.

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