US Government Moves To Regulate Cryptocurrencies After Attorney General Released Enforcement Framework

United States Attorney General (AG) William Barr says the recent publication of the Cryptocurrency Enforcement Framework will help law enforcement agencies fight against elements that use digital currencies for illicit purposes. Produced by the AG’s Cyber-Digital Task Force, the framework provides law enforcement with what Barr calls a “comprehensive overview of emerging threats and enforcement challenges associated with the growing prevalence and use of cryptocurrency.”

The framework’s release comes as US regulators have increased pressure with Bitmex executives and John McAfee as the latest victims of the new approach. However, top US officials, including FBI Director Christopher Wray, pay homage to this revolutionary technology that they say is important and promising.

In his remarks, Wray indicates that the new enforcement framework is only aimed at individuals who facilitate illicit trade using cryptocurrencies.

“At the FBI, we see firsthand the dangers posed when criminals bend the important technological promise of cryptocurrency for illicit purposes,” says Wray. The director explains that employees of his agency observed that “criminals (now) use cryptocurrency to try and stop us from tracking the money in a wide range of investigations.”

Cryptocurrencies are preferred when settling transactions involving illicit goods sold on the dark web. Furthermore, ransomware criminals also prefer to be paid for cryptocurrencies because they perceive this to be difficult to track and trace.

Meanwhile, a member of the Cyber-Digital Task Force, Brian C. Rabbitt, once again praises cryptocurrencies and blockchain, saying they “hold huge promise for the future.” However, Rabbitt further reduces this favorable view of cryptocurrencies by adding that “it is imperative that these important innovations follow the law.”

Rabbitt clarifies that there are red lines, which if crossed, law enforcement will not hesitate to respond:

While the Department of Justice (DOJ) and its partners are committed to supporting the advancement of technologies and legitimate uses of cryptocurrencies, we will not hesitate to enforce the laws governing these technologies when necessary to protect the public.

Another Task Force member, Beth A. Williams praises the release of the Cryptocurrency Enforcement Framework, which reflects the DOJ’s extensive cooperation with domestic and international partners. Williams concludes that this cooperation is intended “for the benefit of legal cryptocurrency users and the general public.”

Meanwhile, in the document, the DOJ says it considers the use of anonymity-enhancing cryptocurrencies (AECs) such as Monero, Zcash and Dash “a high-risk activity that is indicative of possible criminal conduct.”

Not surprisingly, the DOJ also states that mixer and tumbler operators “can be criminally liable for money laundering because these services are specifically designed to hide or disguise the nature, location, source, ownership or control of a financial transaction “.

However, despite the publication of the enforcement framework, the DOJ says it recognizes the importance of working with international partners and inter-agencies in order to improve an already strong enforcement plan.

Do you think the DOJ cryptocurrency application framework will help reduce illicit activities? Tell us what you think in the comments section below.

Image credits: Shutterstock, Pixabay, Wiki Commons