DOJ Names First Director of Crypto Team To Step Up Enforcement 

The Justice Department announced on Thursday the appointment of Eun Young Choi as first director of the National Cryptocurrency Enforcement Team (NCET) to step up the fight against illicit activities with digital assets. 

“With the rapid innovation of digital assets and distributed ledger technologies, we have seen a rise in their illicit use by criminals who exploit them to fuel cyberattacks and ransomware,” said Assistant Attorney General Kenneth A. Polite Jr. of the Justice Department’s Criminal Division. “The NCET will serve as the focal point for the department’s efforts to tackle the growth of crime involving these technologies.” 

The NCET was created to ensure the Justice Department could meet the challenges brought by the criminal misuse of cryptocurrency and digital assets. The NCET will be in charge of identifying, investigating and pursuing cases involving the criminal use of digital assets, with a particular focus on virtual currency exchanges, mixing and tumbling services, infrastructure providers, and other entities that facilitate or commit crimes. 

The NCET hasn´t yet set a list of strategic priorities, but it plans to do so after consulting with other departments and other international partners. Last, the NCET will also provide training to federal, state, local and international law enforcement to “aggressively investigate and prosecute” crimes involving digital assets.  

Law enforcement officials are stepping up their game against illicit activities within the crypto world. This appointment comes days after DOJ announced the arrest of two people for allegedly trying to launder $4.5 billion in stolen cryptocurrency. But the training is not limited to investigating and prosecuting individuals — the government was also able to trace the transactions done with cryptocurrencies and recover $3.6 billion. 

“Federal law enforcement demonstrates once again that we can follow money through the blockchain, and that we will not allow cryptocurrency to be a safe haven for money laundering or a zone of lawlessness within our financial system,” said Polite. “The arrests today show that we will take a firm stand against those who allegedly try to use virtual currencies for criminal purposes.” 

SEC also steps up enforcement of crypto assets 

While the Justice Department is increasing its enforcement actions to deter illicit activities involving digital assets, the Securities and Exchange Commission (SEC) is doing the same when activities are not illicit, but companies may not be in full compliance with the law. 

The SEC is also strongly enforcing securities laws to make sure that companies dealing with cryptocurrencies are properly registered and comply with the disclosure requirements. The SEC started targeting only companies offering cryptocurrencies, but as recently as last week, the agency settled a probe with BlockFi, ordering the company to pay $100 million in penalties for not registering a crypto yield product — a crypto bank account that gave interests up to 9.25%. The extension of the SEC’s enforcement powers to these products sends a signal to crypto companies that it is safer to register your products, and if needed, apply for an exemption to certain rules, rather than being completely unregistered.   

Read More: BlockFi’s $100 Million Settlement With SEC Raises Internal Discussion 

Congress is also increasing efforts to provide a solid legal framework that would close some of the existing regulatory gaps. New legislation could allow stablecoin issuers, crypto exchanges and other companies to operate in a safe environment without risking being subject to investigations or fines. 

Read More: US Draft Bill on Stablecoins Offers Safe Harbor for Issuers 


Sign up here for daily updates on the legal, policy and regulatory issues shaping the future of the connected economy.