The DOJ Takes Aim at Privacy in New Crypto Framework

Oct 8, 2020 at 18:14 UTCUpdated Oct 8, 2020 at 19:06 UTC.U.S. Attorney General William Barr's Department of Justice believes cryptocurrencies pose an emerging challenge to law enforcement activities, according to a new publication filed Thursday.

The DOJ's "Cryptocurrency: An Enforcement Framework" document, published by the Attorney General's Cyber-Digital Task Force, outlines what cryptocurrencies are and their potential use cases, including sections on both legitimate and illicit uses.

The report itself is split into three sections: an overview of the cryptocurrency space and its current illicit uses; the laws and regulatory agencies that oversee the space; and the current challenges and potential strategies to address them.

"Finally, decentralized platforms, peer-to-peer exchangers, and anonymity-enhanced cryptocurrencies that use non-public or private blockchains all can further obscure financial transactions from legitimate scrutiny," the report said.

Much of the first section of the report simply provides an overview of cryptocurrencies, blockchain and distributed ledgers more broadly and how they've been used over the past few years.

"As discussed in Part I, a wide range of criminal activity may involve or be facilitated by the use of cryptocurrency. On numerous occasions, the Department of Justice has used available legal tools to pursue successful prosecutions of such activity," the report said in the opening to its second section.

The DOJ report also took particular aim at privacy coins, mixers, tumblers and other tools that are intended to conceal aspects of transactions.

The report similarly had an emphasis on national security concerns created by cryptocurrencies in its conclusion, saying rogue states and terrorists could take advantage of decentralized assets to undermine financial markets, avoid sanctions and fund harmful activities.

"As the use of cryptocurrency evolves and expands, so too will opportunities to commit crime and to do harm by exploiting cryptocurrency technology," the report said.

"Ultimately, illicit uses of cryptocurrency threaten not just public safety, but national security, as well Current terrorist use of cryptocurrency may represent the first raindrops of an oncoming storm of expanded use that could challenge the ability of the United States and its allies to disrupt financial resources that would enable terrorist organizations to more successfully execute their deadly missions or to expand their influence."