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Authorities Highlight Cryptocurrencies' Role in Criminal Activity, Call for Enhanced Measures

Authorities Call for Collaborative Action to Combat Cryptocurrency-Related Crime

Thu, 11 May 2023, 10:52 am UTC

Cryptocurrencies have become increasingly intertwined with criminal activity, as evidenced by the rise in ransomware attacks and state-sponsored operations involving digital assets. This message was conveyed by Eun Young Choi, Director of the National Cryptocurrency Enforcement Team (NCET) at the U.S. Department of Justice (DOJ), during a recent conference organized by the Financial Times.

At the conference, representatives from the U.S. Department of Justice, the U.K. National Police, and private sector organizations discussed the challenges faced by the cryptocurrency industry and the efforts to protect consumers from fraudulent activities. Choi and other participants acknowledged the need for a new approach to tackle cryptocurrency-related crimes due to their unique complexities. Choi highlighted the decentralized nature of cryptocurrencies as a hurdle for law enforcement, making it challenging to freeze transactions as in traditional financial systems.

The panelists also addressed the risks associated with certain cryptocurrency exchanges and platforms like tumblers or mixers, which obfuscate the identities of transaction participants. They agreed that the most significant threats arise from entities that lack proper risk management and compliance measures.

Phil McInerney emphasized the importance of collaboration between the public and private sectors to combat crypto-related criminal activities. Aidan Larkin, CEO of Asset Reality, a company assisting law enforcement in recovering stolen assets, expressed optimism about the potential of such partnerships. However, he acknowledged the complexities of criminal investigations in the borderless realm of digital assets.

The panelists also raised concerns about underreporting of crypto crimes by victims and urged the public to report all instances of criminal activity, regardless of the extent of financial losses incurred. The discussion concluded with Eun Young Choi expressing the DOJ's interest in examining the growing use of decentralized platforms, which can be exploited to evade regulatory authorities. She cautioned that criminal activities in this domain are likely to increase in the coming years.

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