The report includes types of “threats”, how to deal with them, and government challenges. The agency praises the technology but expects an increase in its criminal use.
In recent days, the US Department of Justice issued a legal action framework for the regulation of Bitcoin and other cryptocurrencies through the Attorney General’s office. According to the document, cryptocurrencies could change the way human beings interact and organize as a society.
However, the report warns that technological evolution; its potential expansion will create opportunities to commit crimes, thus jeopardizing public security and that of the United States.
The document, entitled “Cryptocurrencies: an application framework”, includes the types of “emerging threats”, explains how to face them, and mentions the challenges for the country.
Concerning threats, these would be of three types: financial transactions related to the commission of crimes, money laundering, and robberies, which also include cryptocurrency markets.
The second part shows a list of the legal instruments and regulations that the government has in place to minimize threats. These include the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), units of the Treasury Department, and the Department of Justice itself.
The third part reviews the challenges that government authorities have to overcome regarding “business models”. In other words, this explains how Bitcoin exchanges, cryptocurrency exchange kiosks, or casinos that operate with crypto assets work. Regarding obfuscation techniques, it mentions the different types of cryptocurrency mixing that “can facilitate criminal activity.”
One of the conclusions of the report highlights that “criminals expand and perfect techniques designed to evade detection and arrest.” It states that “Illicit uses of cryptocurrencies threaten not only public security, but also national security.” It also says that “cryptocurrencies can provide terrorist organizations with an instrument to bypass traditional financial institutions to obtain, transfer and use funds.”
The document highlights that cryptocurrencies can help individuals evade international sanctions. According to the Justice Department, this is “a new worrying opportunity to undermine traditional financial markets.”
Department of Justice Has an Eye on Bitcoin
According to the report’s conclusion, the agency aims to ensure that the law effectively regulates cryptocurrencies and that they are compatible with established legislation and national security. Otherwise, “the true transformative potential” would be at risk, as the final part of the document reads.
The Digital Cyber Task Force, a unit of the Attorney General created in 2018 to counter “global cyber threats”, is in charge of developing the legal action framework.
The Attorney General submits a framework, which is not yet a final law or standard on how to use cryptocurrencies like Bitcoin. The document provides an overview of the current scenario in the Bitcoin ecosystem and its potential benefits, as well as its possible risks.
One of the institutions that have been most interested in knowing how cryptocurrencies work is precisely the US Department of Justice. In November 2015, the agency even discussed crypto assets and blockchain.
Various representatives of regulatory agencies and companies, such as BitFury, BitPay, Circle, Coinbase, Kraken, and XAPO, contributed to the debate. They were seeking to promote dialogue and mitigate potential cybercrime.
Last May 2018, the department announced an investigation into possible manipulation of the cryptocurrency market. The investigation sought to determine the execution of false orders for the purchase or sale of crypto assets.
By Alexander Salazar
