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The United States’ newly-created National Cryptocurrency Enforcement Team is set to put the sector under greater scrutiny

Author: Syedur Rahman  6 October 2021

The US Department of Justice (DOJ) has announced the creation of a National Cryptocurrency Enforcement Team (NCET).

The NCET has been formed to investigate and prosecute the criminal misuse of cryptocurrency. This includes crimes committed by virtual currency exchanges and mixing and tumbling services and those involved in money laundering. Its creation follows concerns voiced by Gary Gensler, chair of the US Securities and Exchange Commission (SEC), about the need to regulate digital assets.

The DOJ’s announcement came on the same day that it launched its Civil Cyber-Fraud Initiative to tackle what it classes as emerging cyber threats that target “sensitive information and critical systems.” 

The DOJ appears to be focusing on cryptocurrency exchanges, with the NCET set to target abuse on cryptocurrency platforms in order to boost user confidence.

The DOJ has said that the NCET will focus on prosecuting criminal activity involving the use of cryptocurrencies “from being the primary demand mechanism for ransomware payments, to money laundering and the operation of illegal or unregistered money services businesses, to being the preferred means of exchange on ‘dark markets’”. The NCET will also seek to trace and recover assets lost through criminal activity involving cryptocurrency.

The NCET will be responsible for:

  • Investigating and prosecuting cryptocurrency crime.
  • Developing priorities for investigations and prosecutions.
  • Identifying areas where investigations need to be focused, such as money laundering, ransomware, human trafficking, drugs traffickers and financial institutions working with cryptocurrency.
  • Building and maintaining relationships with federal, state, local and international law enforcement agencies that investigate and prosecute cryptocurrency matters and private sector bodies that have involvement with cryptocurrency.
  • Training and advising federal prosecutors and law enforcement agencies in crypto-related investigation strategies.
  • Coordinating the sharing of information and evidence relating to cryptocurrency crime among law enforcement officers.

The creation of the NCET is a sign that companies working in the cryptocurrency sector can expect greater scrutiny from the DOJ. It is an indicator – if one was needed – of the importance of companies ensuring their compliance programmes and procedures are reducing the crypto-related risks they face. With the regulatory landscape relating to cryptocurrency subject to change, no business that has involvement with crypto can afford to be complacent regarding compliance.

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Syedur Rahman is known for his in-depth experience of serious fraud, white-collar crime and serious crime cases, as well as his expertise in worldwide asset tracing and recovery, civil recovery, cryptocurrency and high-stakes commercial disputes.

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