DOJ Announces National Cryptocurrency Enforcement Team

Cryptocurrency has become an asset for bad actors who use the platforms to demand ransom, launder money, and facilitate other illegal activity. As a result, Lisa O. Monaco, the Department of Justice’s (DOJ) deputy attorney general, announced the creation of the National Cryptocurrency Enforcement Team (NCET).

The NCET will utilize resources and expertise from the DOJ Criminal Division’s Money Laundering and Asset Recovery Section (MLARS), Computer Crime and Intellectual Property Section (CCIPS), and other sections of the division, along with US attorneys’ offices across the country.

The team will focus on tracing and recovering assets lost to fraud, extortion, and cryptocurrency payments to ransomware groups, the announcement stated.

“Today we are launching the National Cryptocurrency Enforcement Team to draw on the Department’s cyber and money laundering expertise to strengthen our capacity to dismantle the financial entities that enable criminal actors to flourish — and quite frankly to profit — from abusing cryptocurrency platforms” Monaco explained in the announcement.

“As the technology advances, so too must the Department evolve with it so that we’re poised to root out abuse on these platforms and ensure user confidence in these systems.”

Cryptocurrency is used in a wide range of criminal activities, from ransomware schemes to money laundering. The NCET will begin by developing strategic priorities for cryptocurrency investigations and prosecutions, guided by the DOJ’s Cryptocurrency Enforcement Framework, released in October 2020.

The announcement explained that the team plans to develop relationships with federal, state, local, and international law enforcement agencies, train federal prosecutors, and collaborate with private sector actors who have cryptocurrency expertise.

The NCET aims to focus its enforcement actions on ransomware schemes, money launderers, human traffickers, narcotics traffickers, and financial institutions related to cryptocurrency.

The DOJ has not yet announced who will lead the enforcement team, but the leader will be selected based on their experiences with complex criminal investigations and knowledge of cryptocurrencies and the blockchain.

In late September, the US Department of the Treasury announced its first-ever sanctions against a cryptocurrency exchange for its alleged role in facilitating ransomware payments for cybercriminals.

The cryptocurrency exchange, SUEX, was accused of aiding ransomware payments for its own financial gain. Any US entity that does business with SUEX could face enforcement actions.

The Treasury’s Office of Foreign Assets Control (OFAC) also issued an advisory recently warning companies of potential sanctions risks associated with facilitating ransomware payments.

“Demand for ransomware payments has increased during the COVID-19 pandemic as cyber actors target online systems that U.S. persons rely on to continue conducting business,” OFAC’s statement explained.

“Companies that facilitate ransomware payments to cyber actors on behalf of victims, including financial institutions, cyber insurance firms, and companies involved in digital forensics and incident response, not only encourage future ransomware payment demands but also may risk violating OFAC regulations.”

Almost all major ransomware groups use cryptocurrency as a means to obtaining ransomware payments and exploiting their victims. Healthcare is continually being targeted by malicious ransomware actors who infiltrate networks, encrypt files, and demand payment from their victims.