FBI To Launch Crypto Crime Fighting Unit

According to Forbes, Crypto-related crimes have increased from 0.34% in 2020 to 0.62% in 2021.

Investopedia has it that crypto criminals held about $8 billion in digital assets in 2020 and now hold about $11 billion in 2021.

On this note, the Department of Justice announced that the FBI is forming a special team to tackle cryptocurrency crimes.

In February 2022, Lisa Monica announced the National Cryptocurrency Enforcement Team (NCET) launch.

The NCET will be responsible for investigating and prosecuting crypto crime and other illicit activities.

Lisa Monaco said the new unit would conduct its blockchain analysis and confiscate assets considered proceeds of crypto crime.

In February, the Department of Justice charged a New York couple for laundering Bitcoin related to the hack of Bitfinex that occurred in 2016.

Similarly, the US Government task force seized about $2 million worth of digital assets that were paid as ransom by a US colonial pipeline system after its infrastructure was hacked.

The new crypto crime-fighting unit under the Federal Bureau of Investigation (FBI).

The US Government plans to set up an international virtual currency initiative to complete and facilitate joint global law enforcement collaboration.

Keywords: FBI, cryptocurrency, crypto, crime, unit, enforcement, US, Government, NCET.

Crypto-related crimes are becoming prevalent by the day. According to Forbes, Crypto crime stood at 0.34% in 2020 and has risen to 0.62%. Similarly, Investopedia reported that Crypto criminals held about $11 billion worth of assets from illicit sources in 2021, having moved from $8 billion in 2020.

As various Government institutions are devising ways to apprehend, tackle and curb these crimes to the barest minimum, the Department of Justice is not left behind. The Department of Justice has announced that the Federal Bureau of Investigation (FBI) is forming a special team to tackle cryptocurrency crimes.

Not to worry, this article will highlight the details and activities of this newly launched FBI unit that will fight crypto crimes.

Let's begin.

The National Cryptocurrency Enforcement Team (NCET)

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Image: Merkle Science

On the 17th of February, 2022, Lisa Monica, the Deputy Attorney General of the Department of Justice, announced that a new unit would be created in the Federal Bureau of Investigation. The new branch will be called the National Cryptocurrency Enforcement Team (NCET) and will be saddled with the responsibility of investigating and prosecuting crypto crime and other illicit activities.

At a keynote address delivered by Monaco at the Munich Cyber Security Conference, Lisa Monaco said the new unit would conduct its blockchain analysis and confiscate assets deemed proceeds of the crime. When asked a question, Lisa Monaco said, “I think we are sending a message that cryptocurrencies and virtual currencies should not be considered a haven.

This statement points to the fact that criminals now use digital assets to keep the proceeds of illegal activities. In recent times, we have seen kidnappers requesting Ransomes in cryptocurrency. They hold on to a valuable asset such as persons or information and request for ransom before reading the withheld asset. The victims are compelled to pay in crypto assets.

Money launderers have devised ways to transfer stolen public funds into anonymous crypto wallets. These criminals and their accomplices are able to move these funds from one crypto wallet to another. Via this method, cyber hackers have siphoned vast digital assets with little or no trace.

For instance, in February, the Department of Justice charged a New York couple for laundering Bitcoin related to a 2016 hack of Bitfinex, a digital cryptocurrency exchange. After about four years of tracking, law enforcement officials recovered nearly $3.6 billion of the stolen funds, and the Department of Justice considered it the largest-ever financial seizure.

Similarly, the US Government task force seized about $2 million in digital assets after a United States Colonial Pipeline system paid the sum of a cyber-attack ransom. The cyber attack affected the computerized equipment managing this infrastructure and paralyzed their operations.

The prevalence of these issues necessitated the need to have a strong unit like the National Cryptocurrency Enforcement Team, as a full-fledged unit under the Federal Bureau of Investigation and the Virtual Asset Exploitation Unit (VAXU).

Asides that the Federal Bureau of Investigation will go after criminals and charge them in court, the newly created NCET will focus solely on crypto crimes. Having a separate unit to monitor and apprehend crypto crimes will bring about efficiency and speedy apprehension of crypto criminals.

Image: Coinscreed

Interestingly, this FBI team will be headed by Eun Young Choi, an expert in crime tackling and a long-time prosecutor. According to Lisa Monaco, the newly launched team will focus on crypto exchanges, mixers, tumblers, and other digital asset infrastructure platforms that might aid the illegal and criminal (mis)use of cryptocurrencies.

She further added that there would be a significant focus on Ransomware. “Law enforcement officials have to bust business models for launching these types of attacks,” Lisa Monaco said.

The ransomware aspect of crypto crime is of significant concern as various attacks on individuals’ crypto wallets keep recurring. Over the years, blockchain protocols have also been subjected to phishing attacks leading to irredeemable loss. These attackers request considerable amounts in digital assets, and the blockchain protocols or exchange platforms are compelled to make the payments.

The National Cryptocurrency unit will also strengthen the ongoing efforts of the existing criminal divisions to fight crypto crime. According to the press release detailing the launch of this new FBI unit, part of the functions of the new crypto fighting unit will be to “ enhance the Criminal Division’s existing efforts to provide support and training to federal, state, local and international law enforcement to build capacity, aggressively investigate and prosecute serious crimes involving cryptocurrency and digital assets in the United States and around the world.”

Finally, Lisa Monaco said the Government is looking forward to setting up an international virtual currency initiative to facilitate joint global law enforcement collaboration. This initiative will take the fight and activities beyond the US border; it now becomes a joint effort.

The collaboration is expected to improve the techniques and abilities in crypto crime investigations alongside innovating crypto tools and blockchain analysis to guard against imminent cyber threats.

Conclusion

Undoubtedly, the newly formed National Cryptocurrency Enforcement team will live up to its task, apprehend criminal actors, confiscate the proceeds and reduce crypto crimes to the barest minimum in the United States and across the globe.

Author: Valentine. A, Gate.io Researcher

This article represents only the researcher's views and does not constitute investment suggestions.

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