DoJ officials are revving up their National Cryptocurrency Enforcement Team just as Russia may use cryptocurrencies to subvert sanctions.
Has Vlad the Crimea Impaler lost has mind?
In the wake of the assault on Ukraine, FTF News is far from the only one asking that question.
What’s next? What will stop Vladimir Putin?
Around the U.S. and Canada, Russian Vodka is being pulled from liquor store shelves.
And if that doesn’t dissuade him from making war in Europe, more severe sanctions might do the trick, particularly if they include cutting off Putin, his cronies, and his army of experienced hackers from the world’s financial systems and blocking them from turning to so-called “alternate” financing via cryptocurrencies.
“Hacking techniques like ransomware could help Russians steal digital currencies and make up revenue lost to sanctions,” a recent New York Times dispatch, “Russia Could Use Cryptocurrency to Blunt the Force of U.S. Sanctions,” points out, adding that the Russian government is developing its own central bank digital currency, “a so-called digital ruble that it hopes to use to trade directly with other countries willing to accept it without first converting it into dollars.”
“And while cryptocurrency transactions are recorded on the underlying blockchain, making them transparent, new tools developed in Russia can help mask the origin of such transactions. That would allow businesses to trade with Russian entities without detection,” the Times story notes.
The crypto/digital currency option could help Putin’s oligarchs who have sent trillions overseas, which “creates a huge vulnerability that the West can exploit,” a recent Paul Krugman opinion piece in the Times, “Laundered Money Could Be Putin’s Achilles’ Heel,” suggests.
Eun Young Choi
Enter the U.S. Justice Department’s National Cryptocurrency Enforcement Team (NCET), now headed by Eun Young Choi, a former senior counsel to the DoJ’s deputy attorney general.
“The NCET will serve as the focal point for the department’s efforts to tackle the growth of crime involving these technologies,” says Assistant Attorney General Kenneth A. Polite Jr. of the DoJ’s criminal division, in a statement.
The NCET’s mission is to “identify, investigate, support and pursue the department’s cases involving the criminal use of digital assets, with a particular focus on virtual currency exchanges, mixing and tumbling services, infrastructure providers, and other entities that are enabling the misuse of cryptocurrency and related technologies to commit or facilitate criminal activity,” according to the DoJ.
“The NCET will set strategic priorities regarding digital asset technologies, identify areas for increased investigative and prosecutorial focus, and lead the department’s efforts to coordinate with domestic and international law enforcement partners, regulatory agencies and private industry to combat the criminal use of digital assets,” DoJ officials say. “Finally, 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 National Cryptocurrency Enforcement Team’s mission statement also includes “close collaboration” with other elements of the DoJ, “including the Criminal Division’s Computer Crime and Intellectual Property Section and Money Laundering and Asset Recovery Section; the U.S. Attorneys’ offices; the National Security Division; and the FBI, including the FBI’s new Virtual Asset Exploitation Unit, a specialized team of cryptocurrency experts dedicated to providing analysis, support, and training across the FBI, as well as innovating its cryptocurrency tools to stay ahead of future threats.”
Choi herself, NCET’s first director, began her DoJ career as an Assistant U.S. Attorney for the Southern District of New York, “where she served as the office’s Cybercrime Coordinator and investigated and prosecuted cyber, complex fraud, and money laundering crimes, with a particular focus on network intrusions, digital currency, the dark web, and national security investigations,” according to the DoJ statement.
Choi “served as lead prosecutor in a variety of cases, including the investigation of a transnational organization responsible for the hacking of J.P. Morgan Chase and a dozen other financial companies; the operation of Coin.mx, an unlicensed virtual currency exchange; and the only U.S. prosecution brought in connection with the ‘Panama Papers.’ In addition, she successfully argued the appeal before the Second Circuit in the case against Ross Ulbricht, the founder and chief administrator of the Silk Road, the first darknet marketplace,” DoJ officials say.
FTF News contacted the media information website at DoJ for comment, pointing out that the war in Europe has led, inevitably, to sanctions against the Putin regime and noting that the widespread expectation is that Putin’s reaction will include cyberattacks against his perceived enemies.
(Photo by Aadesh Thapa via Unsplash.)
FTF News asked, specifically, whether or not the NCET agrees with this assessment, and if Choi as NCET’s director, expects the DoJ will be able to thwart the attacks, if and when they come.
By deadline, there was no reply to the questions FTF News had posed.
Of course, these questions and concerns soon may become moot. Putin has put Russia’s nuclear forces on “high alert,” according to recent media reports from the Associated Press and others. So … Good luck, cyber defenders! Good luck, world!
And if American policymakers are looking for a way to find Putin’s cronies literally where they live, they might consult this helpful compilation from the New York Post, the venerable Rupert Murdoch-owned newspaper, founded by Alexander Hamilton: https://bit.ly/3vsklV9
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