US Department of Justice’s sprawling report reveals regulatory enforcement priorities for cryptocurrencies and highlights multi-agency cooperation.
On October 8, 2020, the US Attorney General’s Cyber-Digital Task Force of the Department of Justice (DOJ) published an extensive white paper, titled Cryptocurrency: An Enforcement Framework (the Report). The Report gives a detailed overview of legitimate uses of cryptocurrencies, the risks of illicit cryptocurrency activity, and related federal enforcement challenges and response strategies.
Attorney General William P. Barr’s remarks announcing the Report highlighted the regulatory balance between supporting innovation and prosecuting abuse: “Cryptocurrencies and distributed ledger technology present tremendous promise for the future, but it is critical that these important innovations follow the law.” Insofar as the Report provides a roadmap of the DOJ’s priorities for cryptocurrency enforcement, all market participants in the cryptocurrency space should be aware of its contents and the government’s evolving expectations for risk management and controls.
The Report is the Cyber-Digital Task Force’s second, after a July 2018 white paper on cyber threats, and is organized into three sections:
- An overview of cryptocurrency technology and the risks and illicit uses of cryptocurrency
- The laws and regulatory agencies that oversee cryptocurrencies and the enforcement tools at their disposal
- Ongoing challenges and potential strategies related to illicit uses of cryptocurrency
Highlights from the Framework
The Report is clear that blockchain technology and cryptocurrencies may be