The Justice Department last fall stood up the National Cryptocurrency Enforcement Team (NCET) to investigate and prosecute criminal misuse of cryptocurrency, and it has since appointed Eun Young Choi as its first director.
The team's mission is “to tackle complex investigations and prosecutions of criminal misuses of cryptocurrency, particularly crimes committed by virtual currency exchanges, mixing and tumbling services and money laundering infrastructure actors.”
NCET and its mission have arisen amid rising crime and fraud cases related to cryptocurrency. DOJ’s Cyber Digital Task Force found in its October 2020 Cyrptocurrency Enforcement Framework that at least $1.7 billion in cryptocurrency was stolen or scammed in 2018. That number more than doubled in 2019, with over $4.5 billion in cryptocurrency lost to theft or fraud.
Although the Criminal Division already led DOJ investigations and prosecutions related to criminal misuse of cryptocurrency through its Money Laundering and Asset Recovery Section (MALRS) Digital Currency Initiative, the task force’s findings called for a grander scope of enforcement work around cryptocurrency.
Consequently, DOJ formed NCET — a cross-cutting team drawing from talent across MALRS, the Computer Crime and Intellectual Property Section and other detailees to the Criminal Division from various U.S. Attorneys’ Offices across the country. Together this team will:
- Investigate and prosecute cryptocurrency cases and misuse
- Develop strategic priorities for and identify areas for increased focus in cryptocurrency-related investigations and prosecutions
- Build relationships with cryptocurrency-focused Assistant U.S. Attorneys and prosecutors with other DOJ litigating components to pursue cryptocurrency investigations and prosecutions
- Develop and maintain relationships with federal, state, local and international law enforcement agencies that investigate and prosecute cryptocurrency cases
- Train and advise federal prosecutors and law enforcement agencies in developing investigative and prosecutorial strategies
- Support information-sharing and coordination across law enforcement offices for investigations and prosecutions
- Collaboration and build relationships with private sector experts in cryptocurrency to support criminal enforcement
Choi as NCET’s first director brings experience having served as senior counsel to Deputy Attorney General Lisa Monaco. Earlier in her career, she was assistant U.S. attorney for the Southern District of New York, where she was the office’s cybercrime coordinator.
As cybercrime coordinator, Choi investigated and prosecuted fraud and money laundering crimes and malicious cyber activities — especially around network intrusions, digital currency, and dark web and national security investigations.
“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,” Choi said. “I am excited to lead the NCET’s incredible and talented team of attorneys, and to get to work on this important priority for the department.”
Along with the announcement of Choi’s appointment, DOJ said the FBI is standing up its new Virtual Asset Exploitation Unit, which will consist of cryptocurrency experts dedicated to analysis, support and training across the FBI in digital assets. This team will work with NCET and also innovate its own cryptocurrency tools to stay ahead of future threats, DOJ said.
As NCET and Choi build their foundation in cryptocurrency law enforcement, the White House has also recognized the need for cross-agency collaboration in developing safeguards around cryptocurrency and digital asset exchange.
President Joe Biden signed in early March the Executive Order on Ensuring Responsible Development of Digital Assets. The order looks to not only mitigate and address illicit use and national security threats from digital assets and cryptocurrency, but it also aims to drive consumer protections around cryptocurrency, as well as mitigating national and international financial systemic risk.
The order will also support technological advances and ensure responsible development and use of digital assets, promote equitable access to safe and affordable financial services, and even explore the formation of a U.S. Central Bank Digital Currency. These activities cut across not only DOJ, but also the departments of the Treasury, Defense, Commerce, Labor, Homeland Security, Energy and more.