DOJ Announces Cryptocurrency Enforcement Framework

On Thursday, United States Attorney General William Barr announced that the Department of Justice (DOJ) released a publication created by the Department’s Cyber-Digital Task Force, entitled, “Cryptocurrency: An Enforcement Framework.” According to the release, the framework will offer a thorough overview of emerging threats and challenges posed by the increasing prevalence and use of cryptocurrency, while describing the DOJ’s relationships with domestic and worldwide enforcement and regulatory partners and showcasing the DOJ’s response strategy.

“Cryptocurrency is a technology that could fundamentally transform how human beings interact, and how we organize society.  Ensuring that use of this technology is safe, and does not imperil our public safety or our national security, is vitally important to America and its allies,” Barr said. “I am grateful to the Cyber-Digital Task Force for producing this detailed report, which provides a cohesive, first-of-its kind framework for those seeking to understand federal enforcement priorities in this growing space.”

“At the FBI, we see first-hand the dangers posed when criminals bend the important technological promise of cryptocurrency to illicit ends,” FBI Director Christopher Wray said. “As this Enforcement Framework describes, we see criminals using cryptocurrency to try to prevent us from ‘following the money’ across a wide range of investigations, as well as to trade in illicit goods like criminal tools on the dark web. For example, the cyber criminals behind ransomware attacks often use cryptocurrency to try to hide their true identities when acquiring malware and infrastructure, and receiving ransom payments. The men and women of the FBI are constantly innovating to keep pace with the evolution of criminals’ use of cryptocurrency.”

The framework includes an essay from Associate Deputy Attorney General Sujit Raman, who chaired the Task Force. The first part of the framework gives an overview of the threat and categorizes cryptocurrency, as follows: “(1) financial transactions associated with the commission of crimes; (2) money laundering and the shielding of legitimate activity from tax, reporting, or other legal requirements; and (3) crimes, such as theft, directly implicating the cryptocurrency marketplace itself.” The second part of the framework articulates the government’s available legal and regulatory tools to combat these posed threats and points to partnerships with the Securities and Exchange Commission, the Commodity Futures Commission, and agencies within the Department of Treasury to enforce the law in regards to cryptocurrency. The third part of the Framework explores the challenges the government continues to face for cryptocurrency enforcement, including issues such as business models and activities that “may facilitate criminal activity.” 

This is the second report from the Cyber-Digital Task Force, “which was established in February 2018 to answer two basic questions: How is the Department of Justice responding to global cyber threats? And how can federal law enforcement accomplish its mission in this area more effectively.” In July 2018, the Task Force published a report covering a large array of cyber threats and highlighted the DOJ’s effort and priority to combat these threats.

“The Department of Justice is committed to protecting the public from current and emerging cyber threats, including those involving cryptocurrency and related technologies,” Task Force member Beth A. Williams, who serves as Assistant Attorney General for the Office of Legal Policy, said. “This Framework reflects the Department’s extensive cooperation with domestic and international partners in ensuring that we are adequately addressing these challenges, to the benefit of lawful cryptocurrency users and the public at large.”