Importantly, the DOJ has stated that the NCET’s approach will be “informed by” the ministry’s cryptocurrency enforcement framework, released in October 2020. This framework limits the enforcement activity of the DOJ. to the illicit uses of cryptocurrency and stresses the importance of interagency partnerships with regulatory bodies such as FinCEN, OCC, SEC and CFTC. In announcing the creation of the NCET, the DOJ said the team “will tackle the complex investigations and prosecutions of criminal cryptocurrency abuses, especially crimes committed by virtual currency exchanges, mixing services and tumble and money laundering infrastructure players. Under the leadership of Deputy Attorney General of the Criminal Division Kenneth A. Polite Jr., the NCET will be made up of a team of lawyers originally drawn from the Money Laundering and Asset Recovery Section (MLARS) and the Computer Crime and Intellectual Property Section (CCIPS) of the Criminal Division. as well as deputy American prosecutors seconded to the criminal division.
NCET will focus more DOJ attention and resources on a range of issues associated with cryptocurrencies, including ransomware payments, money laundering, and violations of BSA, banking and financial laws. securities and commodities by cryptocurrency exchanges and other players. This should be a source of concern for any company or person in the cryptocurrency arena acting with questionable legality, and an added incentive to comply with federal laws and regulations.
The DOJ has already successfully undertaken large-scale cryptocurrency enforcement actions that demonstrate how the NCET would work in coordination with regulators. The department has collaborated in joint criminal and civil enforcement actions with FinCEN against Bitcoin mixer Larry Dean Harmon, and with FinCEN and CFTC against the BitMEX cryptocurrency exchange.
Bloomberg Law subscribers can find information on US federal and state regulation of cryptocurrency activity on our Fintech Compliance resource.
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