More than 150 federal prosecutors from throughout the nation have been engaged by the Justice Department to enhance law enforcement’s efforts to battle the growth in criminality tied to the usage of cryptocurrencies such as bitcoin.
The Digital Asset Coordinators Network aims to appoint subject-matter specialists at U.S. attorney’s offices on the technical and legal complexities of cryptocurrency cases, according to authorities. The Biden administration is introducing the new initiative with the introduction of a larger set of regulatory guidelines from other agencies regarding the development of the digital currency ecosystem on Friday.
Eun Young Choi, the first director of the Justice Department’s national cryptocurrency enforcement team, stated that the network was motivated in part by the high level of technical expertise required to prosecute cryptocurrency cases, as well as the growing popularity of digital currencies across a variety of criminal activities. She noted that these areas of criminality include money laundering or supporting terrorism, a payment mechanism for ransomware hackers, and a direct target of theft.

Since bitcoin and other cryptocurrencies have grown more tempting to criminals as their value and popularity have skyrocketed over the past decade, the Justice Department has progressively devoted more resources to crypto-supported crime. Ms. Choi said that the illicit usage of digital assets has increased in both breadth and volume.
Some cryptocurrency networks, according to regulators, politicians, and law enforcement authorities, provide users anonymity that facilitates money laundering, terrorist financing, and public corruption. In recent months, sanctions and other instruments have been used more often, but criminal charges remain a fundamental component of the administration’s approach to combat rogue actors.
But law enforcement actions are not limited to pressing charges and making arrests. In addition, they have become more committed to disrupting criminals by technological measures — which may need the assistance of cryptocurrency exchanges — and reclaiming stolen cryptocurrency. The Journal reported earlier this month that U.S. investigators confiscated more than $30 million in cryptocurrency stolen from an online game this year by hackers connected to North Korea, one of the greatest victories in recovering digital money from Pyongyang.

The network is also intended to assist the Justice Department as it confronts emerging obstacles in the digital currency ecosystem, such as decentralized finance protocols, which, according to blockchain data organizations, play an expanding role in money laundering and other illegal activity.
Given the numerous pressures imposed on prosecutors, former Justice Department officials had differing opinions about the effectiveness of the newly created network.
Zach Terwilliger, a former U.S. attorney for the Eastern District of Virginia, said, “The proof will be in the pudding as to whether this network is enabled and prioritized or just another bureaucratic layer.”
Sujit Raman, who headed cryptocurrency enforcement operations at the Justice Department until 2020 and now works as the general counsel of blockchain analytics startup TRM Labs, said that the moves were welcome and required given the complexity and technical nature of crypto prosecutions.
Also on Friday, the Justice Department issued a study outlining various regulatory and legislative reforms that, according to the department, might improve law enforcement’s ability to collect evidence and commence prosecutions linked to cryptocurrency criminal behavior.

Among other recommendations, the paper suggests extending to digital-asset service providers the prohibition on staff of financial institutions informing suspects of current investigations. The report, which was mandated by a previous executive order from President Biden, also recommended strengthening a law that criminalizes the operation of unlicensed money-transmitting businesses and extending certain relevant statutes of limitations to account for the complexity of cryptocurrency investigations.
As part of the executive order, the Biden administration issued a series of further studies on cryptocurrencies on Friday. Without prescribing new policy directions or modifications, the studies advocate for a wide expansion of government research and monitoring of crypto markets.
To safeguard consumers, the administration recommends that regulatory agencies such as the Securities and Exchange Commission exercise their current regulatory authority and communicate closely with other regulators.

“As we have witnessed over the last few months, dangers originating from unlawful behavior in the trade of crypto assets continue to be a particularly important worry. This includes frauds, thefts, and cons, according to Treasury Secretary Janet Yellen. “We propose that authorities continue to vigorously pursue their crypto asset-focused enforcement operations.”