The US Department of Justice (DoJ) has named the inaugural director of its newly created National Cryptocurrency Enforcement Team (NCET) to spearhead an intensification of efforts to tackle digital asset crimes.
Eun Young Choi started this month at the helm of a team comprising attorneys from across the department, including prosecutors with backgrounds in fields including tackling cybercrime and money laundering. She is a prosecutor who has worked for the department, which announced it was creating the NCET last autumn, for almost 10 years.
The NCET will identify, investigate, support and pursue the department’s cases involving the criminal use of digital assets, with a focus on virtual currency exchanges, mixing and tumbling services (which mix streams of potentially identifiable crypto-currencies, boosting transactions’ anonymity), infrastructure providers and other entities that are enabling the misuse of crypto-currency and related technologies to commit or facilitate criminal activity’
The NCET will set strategic priorities regarding digital asset technologies, identify areas for increased investigative and prosecutorial focus, and lead the department’s efforts to co-ordinate with domestic and international law enforcement authorities, regulatory agencies – and the private sector – to combat the criminal use of digital assets.
The new team will also seek to enhance the Justice Department Criminal Division’s efforts to provide support and training to federal, state, local and international law enforcement ‘to build capacity to aggressively investigate and prosecute serious crimes involving crypto-currency and digital assets in the United States and around the world’.
NCET ‘will play a pivotal role’
“With the rapid innovation of digital assets and distributed ledger technologies [DLT], we have seen a rise in their illicit use by criminals who exploit them to fuel cyberattacks and ransomware and extortion schemes; traffic in narcotics, hacking tools and illicit contraband online; commit thefts and scams; and launder the proceeds of their crimes,” said assistant attorney-general Kenneth Polite Jr of the Criminal Division in a press release announcing Choi’s appointment.
“The department has been at the forefront of investigating and prosecuting crimes involving digital currencies since their inception,” said Choi, who most recently was senior counsel to the deputy attorney-general Lisa O. Monaco.
“The NCET will play a pivotal role in ensuring that as the technology surrounding digital assets grows and evolves, the department in turn accelerates and expands its efforts to combat their illicit abuse by criminals of all kinds,” she added.
The NCET will work closely with other parts of the department, including the Criminal Division’s computer crime and intellectual property section; money laundering and asset recovery section; the US attorneys’ offices; National Security Division; and the Federal Bureau of Investigation (FBI), which itself has a newly created ‘Virtual Asset Exploitation Unit’.
The FBI’s new unit is a team of crypto experts providing analysis, support and training across the FBI, ‘as well as innovating its cryptocurrency tools to stay ahead of future threats’, according to the Justice Department’s announcement.
DoJ will ‘follow the money’
The Justice Department announced earlier this month that it had seized more than $3.6 billion-worth (about £2.69bn) of digital currency stolen during a 2016 hack of a crypto-currency exchange called Bitfinex and arrested two suspects for allegedly trying to launder the proceeds.
Monaco said that its actions – the largest financial seizure ever by the department – “showed that cryptocurrency is not a safe haven for criminals” and that the department “can and will follow the money, no matter what form it takes”.
Choi’s first role in the Justice Department was as an assistant US attorney for the Southern District of New York, where she was cyber-crime co-ordinator, investigating and prosecuting cyber, complex fraud and money laundering crimes.
*** Separately, the US Federal Reserve earlier this month released a ‘Synthetic Identity Fraud Mitigation Toolkit’ to provide financial institutions, consumers and businesses with a ‘repository of insights and resources’ on synthetic identity fraud.
“Synthetic identity fraud, where fraudsters create an identity out of pieces of real and/or fictitious information, continues to grow and resulted in an estimated $20 billion in losses for US financial institutions in 2020,” said Boston Fed executive vice-president Jim Cunha.