The U.S. Justice Department has tapped more than 150 federal prosecutors across the country to bolster law enforcement’s 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 alongside the release of a broader set of frameworks from other agencies concerning regulatory approaches to developing the digital currency ecosystem.
The network was motivated in part due to the high degree of technical expertise that can go into prosecuting cryptocurrency cases, as well as digital currencies’ increasing popularity across several different areas of crime, said Eun Young Choi, the first director of the Justice Department’s national cryptocurrency enforcement team. Those areas of crime include money laundering or financing terrorism, a vehicle of payment for ransomware hackers, and a direct target of theft, she added.
But law-enforcement efforts extend beyond bringing indictments and making arrests. They also have increasingly been dedicated to disrupting criminals through 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 plundered from an online game this year by hackers linked to North Korea, one of the largest successes clawing back digital revenue from Pyongyang, the Journal reported earlier this month.
Also Friday, the Justice Department released a report proposing potential regulatory and legislative actions that it determined could enhance law enforcement’s capacity to gather evidence and initiate prosecutions related to cryptocurrency criminal activity.
Among other priorities, the report urged expanding existing laws that bar 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 from President Biden, also called for strengthening a law that criminalizes the operation of unlicensed money-transmitting businesses and extending some relevant statute of limitations to account for the complexities posed by cryptocurrency investigations.
Such steps would likely require new legislation from Congress rather than executive action by the president, Ms. Choi said.
The Biden administration also released a series of other reports on cryptocurrencies as part of the executive order on Friday. To protect consumers, the administration is recommending that regulatory agencies like the Securities and Exchange Commission use existing authorities to regulate the sector and coordinate closely with other regulators.
“As we have seen over the past few months, risks stemming from improper conduct related to the trading of crypto assets continue to present an especially grave area of concern. This includes frauds, thefts and scams,” Treasury Secretary Janet Yellen said. “We recommend that agencies continue to rigorously pursue their enforcement efforts focused on the crypto asset sector.”
As the Journal reported earlier, the Biden administration will continue to study the possibility and practicalities of creating a digital dollar.