Justice Department rolls out report detailing cryptocurrency security threats

The Justice Department on Thursday rolled out a framework for cryptocurrency enforcement, detailing increasing security concerns around the use of virtual currency. 

The Cryptocurrency Enforcement Framework, developed by the attorney general’s Cyber Digital Task Force, lays out the threats and enforcement challenges involved with the use of cryptocurrency, along with strategies used by the Justice Department in response. 

“Innovations in technology often change the world for the better. And yet, criminals, terrorists, and rogue states can use those same innovations for their own illegitimate ends, imposing great costs on the public,” the task force wrote in the report. “Today, few technologies are more potentially transformative and disruptive—and more potentially susceptible to abuse—than cryptocurrency.”

“Despite its relatively brief existence, this technology already plays a role in many of the most significant criminal and national security threats our nation faces,” Sujit Raman, the chair of the task force, wrote in the report’s introduction, specifically highlighting concerns around the use of cryptocurrency for criminal activities and in money laundering schemes. 

Attorney General William Barr said in a statement Thursday that the report “provides a cohesive, first-of-its kind framework for those seeking to understand federal enforcement priorities in this growing space.” 

“Cryptocurrency is a technology that could fundamentally transform how human beings interact, and how we organize society,” Barr said. “Ensuring that use of this technology is safe, and does not imperil our public safety or our national security, is vitally important to America and its allies.”

FBI Director Christopher Wray also applauded the release of the enforcement framework. 

“At the FBI, we see first-hand the dangers posed when criminals bend the important technological promise of cryptocurrency to illicit ends,” Wray said in a statement. “As this Enforcement Framework describes, we see criminals using cryptocurrency to try to prevent us from ‘following the money’ across a wide range of investigations, as well as to trade in illicit goods like criminal tools on the dark web.”

He noted that “cyber criminals behind ransomware attacks often use cryptocurrency to try to hide their true identities when acquiring malware and infrastructure, and receiving ransom payments. The men and women of the FBI are constantly innovating to keep pace with the evolution of criminals’ use of cryptocurrency.”

The Justice Department has taken a number of enforcement actions involving cryptocurrency, including filing forfeiture charges in August against 280 cryptocurrency accounts for assisting in laundering millions of dollars stolen during two North Korean hacking incidents. 

The charges came two weeks after the Justice Department seized and dismantled cryptocurrency schemes run by terrorist groups al Qaeda, ISIS and the al-Qassam Brigades, Hamas’s military wing. The more than 300 cryptocurrency accounts seized, along with millions of dollars, were used to raise money and awareness for the terrorist groups. 

“Confronting and addressing those threats is what good public policy should do—and what the crypto ecosystem itself may have to do, if its vision of the future is ever fully to take hold,” Raman wrote. “Meanwhile, federal authorities will continue vigorously enforcing the law as it exists, and pursuing justice on behalf of the American people.”