Tuesday’s report by the United States Department of Justice (DOJ), focuses on international law enforcement in relation to digital assets. This is the first of approximately a dozen reports required by President Joe Biden’s executive order, “Ensuring Responsible Develop of Digital Assets”, dated March 9.
This report, titled “How to Strengthen International Law Enforcement Cooperation for Detecting Investigating and Prosecuting Crime Activity Related to Digital Assets,” was created with the cooperation of Departments of State and Treasury, Homeland Security, and the Securities and Exchange Commission, (SEC), and the Commodity Futures Trading Commission, (CFTC).
The unique challenges of dealing with criminal activity in digital assets presents countries with varying levels of law enforcement capacity, according to the report. These include their anonymity, instantaneity, and the ability to cross border instantly. The report listed ransomware, money laundering, cybercrime and terrorist financing as the most serious criminal activities.
Effective transnational crime-fighting efforts are hindered by weak anti-money laundering/combating the financing of terroristism (AML/CFT), limited legislative frameworks, and lack of expertise.
International enforcement efforts require information sharing. However, effective information sharing between U.S. agencies is essential for international efforts to succeed. The report also noted that a whole-ofgovernment approach improves law enforcement effectiveness overall. To improve information sharing, the United States has signed several agreements and organizations such as the Financial Action Task Force and International Organization of Securities Commissions.
Related: The key to mass adoption of crypto is solving the “sunrise problem”.
It is important that the report recommends more information and cooperation. The report is particularly thorough in its discussion of the need to increase AML/CFT regulation. The report pointed out that criminal actors can take advantage of jurisdictional arbitrage.
Encourage partners to assess and weigh the reputational, national security and policy risks associated with allowing certain businesses dealing in virtual assets to operate within their borders.
Many U.S. agencies offer international training and outreach programs that aid in international crime fighting.