Justice Department Appoints First Director of National Cryptocurrency Enforcement Team

The U.S. Department of Justice (DoJ) earlier this week appointed
Eun Young Choi to serve as the first Director of the National
Cryptocurrency Enforcement Team (NCET) it established last
year.

The NCET was created^[1]
to tackle the criminal misuse of cryptocurrencies and digital
assets,” with a focus on illegal activities in virtual currency
exchanges, mixing and tumbling services, and money laundering
infrastructure actors to fuel cyberattacks and ransomware and
extortion schemes.

“The NCET will serve as the focal point for the department’s
efforts to tackle the growth of crime involving [digital assets and
distributed ledger] technologies,” said^[2]
Assistant Attorney General Kenneth A. Polite Jr. of the Justice
Department’s Criminal Division.

Separately, the Federal Bureau of Investigation (FBI) said it’s
launching^[3]
a new effort called the Virtual Asset Exploitation Unit (VAXU)
dedicated to tracking and seizing illicit cryptocurrencies as part
of a broader endeavor to disrupt international criminal
networks.

The Justice Department is also setting up a new International
Virtual Currency Initiative to allow for international law
enforcement operations to trace blockchain money trails as well as
develop regulations and anti-money laundering legislation to root
out the abuse of cryptocurrency.

The appointment comes as cybercriminals laundered $8.6 billion^[4]
in cryptocurrencies in 2021, up 30% from 2020, according to
blockchain analytics firm Chainalysis. The ill-gotten currencies
account for crypto-native crimes such as darknet market sales or
ransomware attacks in which profits are in digital instead of fiat
currencies.

Furthermore, 2021 witnessed a marked increase in criminal
balances in 2021, with malicious parties holding $11 billion^[5]
worth of funds with known illicit sources at the end of the year,
compared to just $3 billion at the end of 2020.

On top of that, the North Korean advanced persistent threat
(APT) known as Lazarus Group launched at least seven attacks on
cryptocurrency platforms that extracted roughly $400 million^[6] worth of digital assets
in 2021.

That’s not all. Russia-linked cybercriminals also set the pace
for ransomware^[7]
and cryptocurrency-based money laundering activity last year,
raking in nearly 74% of ransom payments^[8] in 2021 — over $400
million worth of cryptocurrency – through strains “highly likely”
affiliated with the country.

“The NCET will play a pivotal role in ensuring that as the
technology surrounding digital assets grows and evolves, the
department in turn accelerates and expands its efforts to combat
their illicit abuse by criminals of all kinds,” Director Choi said
in a statement.