US Department of Justice led by Attorney General, Merrick B. Garland has recommended expansion in capacity building and cooperation, coordination with other nations in order to combat crimes such as illicit use of digital assets especially the cryptocurrencies.
The Attorney General has made these recommendation in report submitted on June 6, 2022, to the President in pursuance of March 9, 2022, Executive Order on Ensuring Responsible Development of Digital Assets.
The US President vide his Executive Order dated March 9, 2022 had noted the risks posed to global financial system by growing use of digital assets such as cryptocurrencies and NFTs throughout the world. It also talked of criminal activities like money laundering, ransomware, terrorist financing, fraud and theft, and sanctions evasion being committed by offenders using cryptocurrencies.
Now through this report, the US Department of Justice has recommended that to effectively tackle the risks posed by illegal use of cryptocurrencies, there is need to strengthen the operational capacity of the department as well as cooperation and coordination in international efforts of various countries and international institutions.
The report says that United States supports the responsible use and development of digital assets, meaning thereby that the US government is not against digital assets as such but it is aware of their misuse in illegal activities like money laundering etc. due to anonymity involved in crypto transactions.
It also talks of unaware consumers being trapped by promises of high returns in investment in crypto assets, transactions of which are increasingly conducted online across various nations. Thus, the reports says, “The crossborder nature of digital asset technologies accordingly requires collaboration with foreign law enforcement partners to locate and gather electronic records and digital evidence involving off-shore digital asset issuers, trading platforms service providers, and other online infrastructure; to seize and prevent further distribution of digital assets linked to crime; and to identify and hold responsible criminal actors who exploit pseudonymity features of the Internet and decentralized finance (DeFi) technologies to avoid detection and prosecution.”
Regulatory inconsistencies across jurisdictions, or in some cases, complete lack of regulation and supervision regarding digital assets’ transactions and money laundering activities endanger not only the global financial system but facilitates the financing of terrorism as well.
Thus, the Report makes recommendations to enhance international cooperation by taking measures such as taking steps to build the capacity of foreign counterparts to conduct the type of complex and highly specialized investigations required in this area; strong mechanism of information sharing, early coordination, and deconfliction in investigations across various domestic and international agencies; and promoting more uniform regulation among the U.S. and foreign partners in the digital assets space.
The complete report is available at this link.
Earlier also, Federal Reserve Governor Christopher J. Waller has stated that crypto-assets regulations are needed to bolster confidence of public in economic system.
