For years, the government has been at a loss on how to regulate cryptocurrency. It seems like it is making some headway as Attorney General William Barr announced the release of “Cryptocurrency: An Enforcement Framework.”
This was released by the Cyber-Digital Task Force of the Attorney General. The framework tackles the challenges associated with cryptocurrency, which is a form of online exchange of payment. There is an emerging trend and the Justice Department realized that there are threats linked to the use of cryptocurrency in the market.
Among the subjects of the publication is the relationships that the Justice Department has with other regulatory and enforcement organizations in the U.S.
What will the Justice Department do in regards to the growing cryptocurrency? The strategies are indicated in the framework.
“Cryptocurrency is a technology that could fundamentally transform how human beings interact, and how we organize society,” Barr said about the digital currency technology. “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.” The framework created by the task force is one of a kind, said Barr.
There are worries that cryptocurrency is being used for criminal activities, which is why the government, for years, has been trying to study ways to introduce regulations for this tech innovation.
“At the FBI, we see first-hand the dangers posed when criminals bend the important technological promise of cryptocurrency to illicit ends,” said FBI Director Christopher Wray. “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.”
As an example, Wray talked about the ransomware attacks. This is when criminals hack a person or an organization’s data. They will either threaten to release the victim’s data to the public or block the victim from accessing their personal files unless they get paid, hence, the reference to ransom.
Wray explained that to hide their identities, the criminals will use cryptocurrency to purchase the malware and other tools to succeed in their ransomware intent. They will also ask that the ransom be paid through cryptocurrency so authorities will have a hard time tracing the money’s movement.
The FBI is working hard to find a way to evolve with the criminals. With the latter using cryptocurrency, the FBI has to be in step with them.
Assistant Attorney General for the National Security Division John C. Demers, who is also a member of the task force, said that the U.S. has been successful in curbing terrorists from funding violent activities using traditional money.
“As the Cryptocurrency Enforcement Framework explains, we will adapt our strategy and tools to 21st century financing, including to combat the use of cryptocurrencies to evade enforcement and harm our national security,” said Demers.
Authorities acknowledge the importance of cryptocurrency as it presents an innovative way to do business without leaving the house.
Task force member Brian C. Rabbitt, also the assistant attorney general for the Criminal division, explained that the framework provides critical information to the public so that they will understand and comply with the legal requirements to enjoy “fast-developing technologies.”
The Cryptocurrency Enforcement Framework opens with an essay penned by Associate Depute Attorney General Sujit Raman, the chair of the task force.
Part one of the framework presents the threat overview of cryptocurrency. The framework identifies three categories of criminal activities that are transacted through cryptocurrency:
- Financial transactions associated with the commission of crimes.
- Money laundering and the shielding of legitimate activity from tax, reporting or other legal requirements.
Part II cites the countermeasures to the criminal or illicit uses of cryptocurrencies. This part also highlights the collaborative partnership among the following agencies: Department of Justice, Securities and Exchange Commission, the Commodity Futures Commission, and agencies within the Department of Treasury.
The goal is to work together to enforce the law within the cryptocurrency space.
Part III is also the last part and it summarizes the government’s challenges and limitations when it comes to cryptocurrency enforcement.
The Cryptocurrency Enforcement Framework is the second comprehensive report from the Attorney General’s Cyber-Digital Task Force.