DOJ discloses second digital asset crime report, launches expert network

By: Mark Jessy

September 17, 2022 8:56 AM

Another report on crypto crime with detailed recommendations for legal reform has been published by the U.S. Justice Department, which has also established a network of experts to advise offices.

The United States Department of Justice (DOJ) released its latest report on digital asset development on September 16 in response to President Joe Biden's March executive order (EO). Concurrently, it announced the launch of the Digital Asset Coordinator Network (DAC) "to further the Department's efforts to combat the growing threat posed by the illicit use of digital assets to the American public."

Its June report on international law enforcement cooperation is complemented by a new report titled "The Role of Law Enforcement in Detecting, Investigating, and Prosecuting Criminal Activity Related to Digital Assets."

The new report defines digital asset crime, focusing on nonfungible tokens (NFTs) and decentralized finance (DeFi), and then analyzes the efforts of different federal agencies to combat this type of crime. It proposes a wide range of changes that could improve police work.

In order of importance, the report suggests expanding anti-tip-off provisions by expanding the definition of "financial institution" within the applicable statutes, modifying the criminal code as it applies to unlicensed money transmitting businesses, and extending the statute of limitation for certain offenses.

A number of recommendations for strengthening penalties and other changes to laws, particularly the Bank Secrecy Act, are included in the report as well. It suggests "adequate funding" to support its initiatives, such as wage subsidies and new hiring practices.

The National Cryptocurrency Enforcement Team, which was announced in December 2017 and formed in February 2018, is in charge of the DAC. Initiated on September 8th, the network has already held its first meeting.

Over 150 federal prosecutors from the U.S. Attorney's Offices and the DOJ's litigating components make up the coordinators. The forum is meant to serve as "the department's primary forum" for information and instruction on how to properly investigate and prosecute crimes involving digital assets. Members of the DAC are recognized as authorities on digital assets within their respective organizations. It sounds like they'll be getting some specialized training to fill that role.