US Justice Department establishes a National Cryptocurrency Enforcement Team (NCET) to investigate criminal activity

  • The US Justice Department has selected members for a newly-created National Cryptocurrency Enforcement Team to deter criminal use of cryptocurrencies.
  • The team will investigate and prosecute perpetrators of crypto-related illicit activities, and recover assets gained or lost from the same.

In the latest war against criminal misuses of cryptocurrencies, the US Department of Justice (DoJ) has decided to develop a National Cryptocurrency Enforcement Team. The division will be in charge of investigations and prosecutions on the use of digital assets to finance criminal activities. The team, as Deputy Attorney General Lisa Monaco says, will also ensure the recovery of all ill-gotten proceeds.

As the DoJ announced on Oct. 6, the National Cryptocurrency Enforcement Team (NCET) will focus on crimes committed by cryptocurrency exchanges. The team will also look into offences perpetrated by mixing and tumbling services. Mixers or tumblers charge customers an extra fee to hide the source of a crypto transaction, making it almost untraceable. Additionally, the team will work to recover assets lost through fraud and extortion, the DoJ said. All this will happen under the supervision of Assistant Attorney General Kenneth Polite Jr.

According to Ms Monaco, the NCET will reinforce the DoJ’s ability “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,

US Justice department battles illicit crypto transactions

Notably, the team’s expertise will come from the DoJ’s criminal division’s money-laundering and asset recovery section. Alongside this unit, will be the computer crime and intellectual property section. US Attorneys’ Offices across the country will also have a part to play.

Currently, NCET is seeking out a leader with experience in criminal investigations. The person should also be one with a background in cryptocurrency and blockchain technology.

Over time, US law enforcement agencies and regulators have been looking for increasingly stringent ways to sever illicit crypto transactions. Last month, the Biden administration blacklisted a Russian-owned virtual currency exchange. The platform was, allegedly, involved in laundering ransomware payments. The move was meant to stave off cyber-extortion attacks by intercepting their primary means of acquiring profit.

In August, Larry Dean Harmon, operator of the Bitcoin mixer Helix, pleaded guilty to conspiracy to launder money. He was fined $60 million by the Financial Crimes Enforcement Network, a bureau of the US Treasury Department.

Last month, the Biden administration through the US Treasury talked of integrating new guidelines to deter crypto-related ransomware attacks. The US government seems keen on eradicating crypto-enabled criminal activities despite the reportedly small percentage of crypto transactions they take up. In 2019, criminal activity represented 2.1 percent of all cryptocurrency transaction volume (roughly $21.4B in transaction volume), as a report from Chainalysis shows. In 2020, the criminal share of all crypto activities fell to just 0.34 percent (about $10.0B worth of transfers).

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