DOJ Releases Second EO Digital Asset Crime Report, Announces New Expert Network

The United States Department of Justice (DOJ) released its latest report on September 16 in response to President Joe Biden’s Executive O...



The United States Department of Justice (DOJ) released its latest report on September 16 in response to President Joe Biden’s Executive Order (EO) on the development of digital assets. At the same time, he announcement the formation of a new network of Digital Asset Coordinators (DACs) “as an extension of the department’s efforts to combat the growing threat posed by the misuse of digital assets to the American public.”

The report, titled “The Role of Law Enforcement in Detecting, Investigating and Prosecuting Criminal Activity Related to Digital Assets,” completes its June report on international law enforcement cooperation.

The new report characterizes the criminal exploitation of digital assets, with particular attention to non-fungible tokens (NFTs) and decentralized finance (DeFi) and then examines the efforts of various federal departments and agencies to combat crime involving digital assets. It recommends various measures to strengthen law enforcement efforts.

The report’s priority proposals include extending the anti-whistleblower provisions by broadening the definition of “financial institution” in applicable laws, amending the penal code as it applies to unlicensed money transfer businesses, and extend the statute of limitations for certain offences.

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The report also suggests changes to the preservation and provision of evidence and recommends tougher penalties and other changes to the laws, particularly the bank secrecy law. It also recommends “adequate funding” for its efforts, including employment incentives and changes in hiring policy.

The DAC has already been launched under the leadership of the National Cryptocurrency Enforcement Team, a body formed in February after announced last year. The network held its first meeting on September 8.

The coordinators are more than 150 federal prosecutors from the United States Attorney’s Offices and the litigation components of the DOJ. It is expected to be “the department’s premier forum” for training and advice on the investigation and prosecution of digital asset crimes. COMC members are designated as their office’s subject matter expert on digital assets. They will apparently receive special training to fulfill this role.