The White House recently released a first-of-its-kind, 38-page report detailing new efforts to fight state and financial corruption. It breaks down the effort into five strategic pillars, one of which bears mention of a new “National Cryptocurrency Enforcement Team”.
Prosecuting Crypto Criminals
The Biden Administration released the document through a statement from the White House’s website on Monday. As reads the statement, the strategy places particular emphasis on reducing “the ability of corrupt actors to use the U.S. and international financial systems to hide assets and launder the proceeds of corrupt acts.”
Under pillar III, titled “Holding Corrupt Actors Accountable,” it states that the DOJ will combat the use of cryptocurrencies for illicit finance through a new, dedicated task force:
“DOJ will utilize a newly established task force, the National Cryptocurrency Enforcement Team, to focus specifically on complex investigations and prosecutions of criminal misuses of cryptocurrency, particularly crimes committed by virtual currency exchanges, mixing and tumbling services, and money laundering infrastructure actors.”
Money laundering is a persistent concern among regulators regarding cryptocurrencies – especially stablecoins. From Gary Gensler to Jerome Powell, fiat-pegged digital assets are perceived as unregulated avenues for global payment that can scale rapidly across illegal payment networks, due to their high liquidity.
Illicit Uses of Cryptocurrencies
That wasn’t the only mention of crypto in the strategy: pillar II titled “Curbing Illicit Finance” re-states the United States’ efforts to review risks posed by digital assets, and to cooperate with other nations in developing a central bank digital currency.
While recognizing the efficiencies and conveniences created by the technology, it names numerous illicit activities for which crypto is purportedly used, including narcotics trafficking and sanctions evasion.
Cryptocurrencies are also an increasingly popular tool for ransomware attacks. The non-reversible nature of crypto transactions leaves victims with no recourse to get their money back from cybercriminals that extort them for money. Earlier this year, John Oliver targeted Monero for marketing itself as a tool for such bad actors.