DOJ Announces Creation of Cryptocurrency Enforcement Team

On October 6, 2021, the Department of Justice (“DOJ”) announced the creation of the National Cryptocurrency Enforcement Team (“NCET”) to investigate and prosecute criminal misuses of cryptocurrency. NCET’s particular focus will be on crimes committed by virtual currency exchanges, mixing and tumbling services, and money laundering infrastructure actors, to include the tracing and recovery of cryptocurrency assets lost in ransomware attacks. NCET will combine the DOJ expertise of lawyers from the Criminal Division’s Money Laundering and Asset Recovery Section (“MLARS”), Computer Crime and Intellectual Property Section (“CCIPS”), as well as other sections in the division.

Deputy Attorney General Lisa Monaco stated the creation of NCET will continue to build upon the DOJ’s success in prosecuting crimes involving cryptocurrency while “combining and coordinating expertise across the Division in this continuously evolving field”.

Cryptocurrencies are often associated with criminal behavoir. While many question the extent to which cryptocurrencies are used in illicit behavoir, the creation of NCET is an important regulatory step that could increase user trust in cryptocurrencies and blockchain technology. Of note, NCET will seek to build relationships with private sector actors having expertise in cryptocurrency matters in order to further its law enforcement mission.

We have been following the U.S. Government’s guidance on blockchain and cryptocurrency for some time. If you are in this industry, or will be integrating these technologies into your operations, and you work with the Federal Government, please contact us. We will help you navigate the developing federal regulations in this field to keep you on the right side of the law.