The Biden administration has unveiled a “national cryptocurrency enforcement team” tasked with taking on complex investigations and prosecutions of criminal misuses of cryptocurrency.
The Justice Department unit, which will be helmed by Assistant Attorney General Kenneth Polite Jr., will focus on “crimes committed by virtual currency exchanges, mixing and tumbling services, and money laundering infrastructure actors,” the DOJ said in a statement.
Cryptocurrency mixing and tumbling services charge customers a fee to launder digital currencies so that the owner and source of the coins are hidden.
“Today we are launching the National Cryptocurrency Enforcement Team to draw on the Department’s cyber and money laundering expertise to strengthen our capacity to dismantle the financial entities that enable criminal actors to flourish — and quite frankly to profit — from abusing cryptocurrency platforms,” Deputy Attorney General Lisa Monaco said Wednesday evening in a statement.
“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.”
The new unit will build upon efforts by the Department of Justice Criminal Division’s Money Laundering and Asset Recovery Section, Computer Crime and Intellectual Property Section and other units, the DOJ said.
The NCET will also seek to recover the illegal profit of crimes involving cryptocurrencies, the department said.
Critics of cryptocurrencies have often noted that digital coins are the payment method of choice among criminals such as drug dealers and ransomware hackers because the coins are untraceable.
A string of ransomware attacks earlier this year that targeted critical US infrastructure, including Colonial Pipeline and meat processor JBS USA, all sought payment in cryptocurrencies.
The formation of the NCET is the White House’s latest effort to crack down on such cyberattacks and attempt to wrangle the rapidly growing crypto market under federal regulation.
The feds have already been moving to crack down on illegal cryptocurrency operators.
Last month, the Biden administration blacklisted a Russian-owned cryptocurrency exchange, called SUEX OTC, for allegedly helping launder ransomware payments, marking the first time the Treasury Department had sanctioned a digital currency platform.