Over the past decade, cryptocurrencies have gained popularity as a viable medium of exchange and investment. The currencies, such as Bitcoin, allow for secure online transactions without the middlemen and fees often associated with normal transactions.
The anonymity problem
Cryptocurrencies, and the systems behind them, provide a level of anonymity which does not often exist in traditional currencies. Since their inception, this has made cryptocurrencies an attractive option for individuals engaging in money laundering or other financial crimes.
The DOJ gets involved
Recently, however, the Department of Justice has begun to focus more directly on the illegal use of cryptocurrencies. They recently announced the creation of a new division, the National Cryptocurrency Enforcement Team (NCET), whose purpose is to target crimes committed in the exchanges and services used by cryptocurrencies. They will also be involved in tracing and recovering assets used in illegal cryptocurrency transactions.
The DOJ has a long history of investigating and prosecuting instances of money laundering and other financial crimes. The intent of the Team is to bring that experience to bear on the new forms of currency and their underlying systems. The Team intends to not only conduct their own investigations and prosecutions, but to assist other federal, state and local departments with their efforts to curtail cryptocurrency misuse.
At present, cryptocurrencies are largely unregulated. As such, their markets and systems continue to be everchanging, with little oversight. The DOJ hopes that, by putting NCET on the ground and getting involved regularly in cryptocurrency transactions, they can continue to learn and stay abreast of the currencies’ changing nature and how they are used to commit crimes.