The U.S. has undertaken numerous high-profile enforcement actions, setting examples that demonstrate its serious stance on crypto-related illegality. Actions against major platforms, individuals, and criminal networks have had significant media coverage and industry impact.
Recent IRS press release confirmed the growing number of crypto-related cases by listing 4 cases involving crypto under the top ten "most prominent and high-profile" cases it investigated in 2023.
There's been a notable increase in collaboration among various agencies, both domestically and internationally. Police, FIUs, and national security agencies are working together more frequently and effectively to trace, track, and tackle crypto-related crimes. This includes sharing information, technology, and strategies to understand and combat illicit activities.
The collaborative efforts of countries in solving the Bitzlato case demonstrate the importance of international cooperation in combating financial crimes and money laundering involving cryptocurrency exchanges.
The NCET will enhance the Criminal Division’s existing efforts to provide support and training to federal, state, local, and international law enforcement to build capacity to aggressively investigate and prosecute serious crimes involving cryptocurrency and digital assets in the United States and around the world. The NCET combats the growing criminal misuse of cryptocurrencies and digital assets, and works closely with domestic and international law enforcement, regulatory agencies, and private industry to address the illicit abuse of digital assets.
The National Cryptocurrency Enforcement Team (NCET) has several priorities in terms of investigating and prosecuting crimes involving digital assets:
Virtual Currency Exchanges: The NCET will focus on cases involving virtual currency exchanges, which are platforms that facilitate the buying, selling, and trading of cryptocurrencies.
Infrastructure Providers: The team will also target infrastructure providers, such as blockchain networks and wallet services, that enable the misuse of cryptocurrency and related technologies.
Mixing and Tumbling Services: The NCET will investigate cases involving mixing and tumbling services, which are used to obscure the origin and destination of cryptocurrency transactions, making it difficult to trace the flow of funds.
Fraud and Extortion: The team will work on cases involving fraud and extortion, including ransomware attacks and cryptocurrency payments made to cybercriminals.
Money Laundering and Asset Recovery: The NCET will collaborate with the DOJ's Money Laundering and Asset Recovery Section to trace and recover assets lost due to fraud and extortion, including cryptocurrency payments made to ransomware groups.
Collaboration with Law Enforcement Partners: The NCET will work closely with the FBI's Virtual Asset Exploitation Unit (VAXU), which is a team of cryptocurrency experts dedicated to providing analysis, support, and training across the bureau.
International Cooperation: The NCET will coordinate with domestic and international law enforcement partners, regulatory agencies, and private industry to combat the criminal use of digital assets.
These priorities reflect the growing challenges posed by the illicit use of cryptocurrencies and digital assets, and the need for a specialized team to address these issues effectively.
.png)
Blockchain analytics leverages data science, artificial intelligence and investigative expertise to structurally tackle limitations faced by law enforcement in the decentralized world. It translates complex blockchain data into actionable intelligence about crypto crimes.
Continuously upgraded platforms identify the latest money laundering typologies by analyzing blockchain data and dark web intelligence. Pattern recognition abilities can detect anomalous behaviors and emerging threats.
One of the primary uses of blockchain analytics by law enforcement is to track and analyze transactions on the blockchain that are related to illegal activities such as money laundering, drug trafficking, or funding terrorism. By examining the flow of cryptocurrencies, agencies can trace the movement of funds from their origin to their final destination.
Blockchain analytics tools use advanced clustering algorithms to link pseudonymous wallet addresses and build transaction graphs. This reveals connections and transaction flows to identify illicit actors despite anonymity attempts.
Information gathered from the blockchain can be used as digital evidence in court cases. This is particularly useful in cases involving financial crimes, cybercrimes, or other illegal activities where cryptocurrencies were used.
Law enforcement agencies use blockchain analytics tools to proactively monitor and flag suspicious activities on the blockchain. This includes tracking large transactions, sudden movements of funds, or patterns that are indicative of criminal behavior.
In cases of fraud, theft, or other financial crimes, blockchain analytics can be used to trace and recover stolen assets. This is crucial in scenarios where traditional methods of asset recovery are challenging due to the decentralized nature of cryptocurrencies.
Law enforcement agencies often share blockchain-related intelligence and analytics with other agencies both domestically and internationally, to combat global cybercrime and terrorism financing networks.
As protocols get complex with features like mixers, swaps, and bridges, analytics tools parse on-chain data to de-obfuscate transaction flows. Forensic analysis of blockchain data enables mapping of money trails through complex DeFi protocols.
Analytics platforms provide user-friendly graphical interfaces, transaction visualizations, and risk-scoring for entities. This makes it easier for investigators to search, analyze and visualize complex blockchain activity without needing deep technical expertise.
