United States Department of Justice Forms New Cryptocurrency Cybercrime Task Force

By: Trevor Judice

What Happened: The United States Department of Justice announced Wednesday they were launching a National Cryptocurrency Enforcement Team. The team’s objective is to enforce and investigate illegal activities that utilize cryptocurrency to fund or receive payment for crime.

Why it Matters: The Department of Justice announcing a new form of cryptocurrency enforcement comes with a string of regulations to the industry being proposed throughout all branches of the United States Government.

Criminals have been utilizing cryptocurrency as a way of receiving payment for illegal activities since the Silk Road was founded in 2011. The anonymous nature of many cryptocurrencies allows criminals to hide behind a hashed address and send and receive money at will.

While Bitcoin and Ethereum used to be the main form of illicit payment, their publicly viewable transactions allow government officials to trace money to its final destination. Certain methods have been used to attempt to obfuscate transaction history. For example, the Liquid Exchange hackers sent $20 million of Ethereum to an eth mixer, which takes in ethereum from many accounts, cryptographically mixes the accounts together, and sends the eth to a slew of addresses. This effectively hides the connection between the sending and receiving wallet.

Furthermore, cryptocurrencies such as Monero, which prides itself on being a private, decentralized blockchain that keeps finances confidential and secure. Monero represents the implementation of an “opaque” blockchain, where accounts sending transactions are hidden.

The untraceability mechanisms provided by Monero and Ethereum make it incredibly hard for teams such as the novice National Cryptocurrency Enforcement Team to track transactions. Instead of attempting to trace funds, however, the team can attempt to catch criminals at blockchain endpoints: the location or method of getting fiat on and off the blockchain, such as when cryptocurrency is sent to cryptocurrency exchanges.

To do so, the DoJ indicated that the enforcement team would go after cybercriminals who use ransomware. Ransomware has become an increasingly popular method of demanding money from infiltrated companies, rising 62% between 2019 and 2020. Hackers target vulnerable people or companies and coalesce them into installing malicious software on their devices. Once activated, the software can control system functions. To deactivate such software and retain sensitive data, companies must pay hackers in the form of cryptocurrency.

The establishment of the National Cryptocurrency Enforcement team reflects the United States Government’s current objective to regulate and monitor cryptocurrency to keep users and investors financially safe.

See more from Benzinga

© 2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.


Be the first to comment

Leave a Reply

Your email address will not be published.


*