Key Takeaways:
- DOJ report is part of the White House’s cybercrime enforcement strategy rolled out in March with an executive order focused on digital asset crime.
- DOJ has announced the formation of a new Digital Asset Coordinator Network (DAC) to tackle cyber crimes
The U.S. Department of Justice has published a new report on crypto crime detailing recommendations for legal reform in the digital asset sector.
The report, titled โThe Role of Law Enforcement in Detecting, Investigating, and Prosecuting Criminal Activity Related to Digital Assets,โ came in response to the White Houseโs heightened cybercrime enforcement strategy rolled out in March with an executive order focused on digital assets and cryptocurrency crime.
In the report, DOJ announced the formation of a new Digital Asset Coordinator Network (DAC) to tackle the “growing threat posed by the illicit use of digital assets to the American public.”
The report highlights that the growing use of digital assets demands strong steps to reduce the risk that digital assets are used for illicit finance or other criminal purposes — such as money laundering, cybercrime, ransomware, narcotics, theft and fraud, and human trafficking — or to undermine the country’s national security by enabling terrorism and proliferation financing.
DOJ is further asking legislators to step in and provide more tools for tackling cybercrime.
The report’s main suggestions include extending anti-tip-off provisions by broadening the definition of “financial institution” within the applicable statutes, amending the criminal code as it applies to unlicensed money-transmitting businesses, and extending the statute of limitation for certain offenses.
DOJ also announced its plans to cooperate with the private sector to handle the management and forfeiture of the digital assets that law enforcement agencies seize from cybercriminals.
“As of July 2022, the FBI identified a digital assets nexus in over 1,100 separate investigations across over 100 distinct investigative program categories, from violent crimes and gangs to weapons of mass destruction to public corruption and terrorism,” the report pointed out.
“Since FY2014, the FBI has seized approximately $427 million in virtual assets,” it continued. DOJ report adds that the FBI has also worked on joint investigations supporting partner agencies that resulted in the seizure of billions of dollars in virtual assets.
Cyber crime involving crypto has been on a surge all around the world. According to a recent report from Chainalysis, between January and March 2022, cybercriminals stole $1.3 billion in cryptocurrencies, almost 97% of which was stolen from DeFi platforms. This is a concerning increase from 72% in 2021 and 30% in 2020, respectively.