FBI Unveils New Unit to Combat Cryptocurrency Crimes

The newly established unit will analyze and track funds associated with illegal activities in the crypto space.

On Thursday, February 17, the Department of Justice (DOJ) revealed that the Federal Bureau of Investigation (FBI) is assembling a specialized task force to address the surge in cryptocurrency crimes.

Key Highlights

• The DOJ has introduced a new FBI unit aimed at identifying and confiscating cryptocurrency tied to unlawful activities.
• Eun Young Choi, an experienced cybercrime prosecutor, will lead the DOJ’s National Cryptocurrency Enforcement Team.
• An international virtual currency initiative will be created to promote global cooperation among law enforcement agencies.
• Data indicates criminals held $11 billion in illicit digital assets by the end of 2021, a significant increase from $3 billion the previous year.

The Virtual Asset Exploitation Unit (VAXU) will bring together crypto security specialists who utilize blockchain analysis to trace and seize illicit digital funds. The unit will also develop innovative tools to counter emerging cyber threats.

DOJ Enhances Cryptocurrency Oversight

This new unit follows the DOJ’s recent indictment of a New York couple accused of laundering Bitcoin connected to the 2016 Bitfinex exchange hack. Authorities successfully seized $3.6 billion in stolen assets, marking the department’s largest financial seizure to date. This achievement came after the DOJ established its crypto enforcement team late last year, comprising experts in anti-money laundering (AML) and cybercrime.

During the Munich Cyber Security Conference, Deputy Attorney General Lisa Monaco announced that Eun Young Choi would head the National Cryptocurrency Enforcement Team (NCET) starting February 17, 2022.

Monaco also highlighted plans to form an international virtual currency initiative that will enhance global law enforcement collaboration and improve investigative capabilities in cryptocurrency cases.

Before NCET’s creation, a government task force successfully seized over $2 million in digital assets linked to a ransomware attack on the Colonial Pipeline system, a critical U.S. infrastructure.

Important

Anti-money laundering (AML) encompasses laws and procedures designed to prevent criminals from disguising illegally obtained funds as legitimate income. Money laundering enables offenders to hide their criminal proceeds.

Strengthening Global Collaboration

Both the NCET and VAXU will collaborate closely to investigate cryptocurrency-related offenses. "Ransomware and digital extortion depend on criminals receiving payment, which means dismantling their financial networks is essential," Monaco stated. "While the currency is digital, our message to businesses is clear: report incidents to us so we can trace the funds, assist you, and help prevent future attacks," she added.

According to blockchain analytics firm Chainalysis Inc., illicit funds held by criminals surged to $11 billion by the end of 2021 from $3 billion in 2020. Monaco noted that the FBI is currently probing over 100 ransomware variants and pursuing cybercriminals responsible for substantial victim losses.

Important

Ransomware is a cyber-extortion method where malicious software locks a user’s system until a ransom is paid. Attackers often demand payment in cryptocurrencies like Bitcoin due to their perceived anonymity and ease of transfer.

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