The U.S. Department of Justice (DOJ) today presented a longstanding regulatory framework for enforcement in the crypto space.
As Attorney General William Barr said, in developing the new legal instrument, the authorities sought to make sure that cryptocurrencies "do not undermine public or national security.
The document describes the strategies that the DOJ intends to follow when working with cryptographic software space. It is divided into three parts. The first provides an overview of threats, including financial transactions for the purpose of committing crimes, money laundering, tax evasion and hacker attacks. The second and third parts deal with enforcement mechanisms and challenges in investigating cryptocurrency crimes.
The document mentions separately the decentralized finance space (DeFi). The DOJ reports that it continues to monitor its development despite the slow development of appropriate regulations.
"The ICO boom that took place a few years ago laid the foundation for the exponential growth of the decentralized finance market in recent months, with all the inherent challenges for law enforcement agencies that want to stay one step ahead and maintain investor safety," the document says.
The DOJ recognizes the potential of cryptocurrencies and blockbusters. The DOJ calls digital assets a significant opportunity for development in the U.S. and "a progressive method of storing and sharing value. The realization of this opportunity requires counteracting existing threats, so the authors encourage industry players to cooperate with regulators.
"To ensure public and national security, all industry participants, from private businesses to regulators, elected officials and individual users of cryptographic software, must ensure that cryptographic software does not become a platform for illegal activities. Indeed, in order to realize the truly revolutionary potential of cryptocurrencies, it is necessary to respond to existing risks," writes the DOJ.
The DOJ also states that the authority of U.S. authorities extends to foreign cryptographic platforms if they "affect U.S. financial and computer systems," are used to import prohibited goods into the U.S. or to provide illegal services and steal money from U.S. residents.
"If virtual currency-related activities violate U.S. laws relating to material support for terrorism, the U.S. government may appropriately establish jurisdiction over such violators anywhere in the world," the agency was told, adding that the use of cryptocurrencies such as Zcash, Monero and Dash may indicate illegal activities. - Unsafe states such as Russia, Iran and North Korea may use crypto currencies to fund cyberattacks aimed at violating U.S. national security.