A recent job posting on the Justice Department’s website is yet another indication that the federal government is about to accelerate its oversight of criminal activity in the crypto world, FOX Business has learned.
The posting says the DOJ is looking to hire a trial attorney with expertise in both cryptocurrencies and blockchain technologies as well as money laundering and asset forfeiture law to work within the department’s Criminal Division. The position will specifically be assigned to a unit focusing on crypto-related crimes. Responsibilities include prosecuting criminals who use digital currencies as vehicles for illegal activity and providing advice to federal agents on legislative and regulatory matters.
The posting, though unremarkable on the surface, is further proof that the federal government is worried about the proliferation of crimes involving digital currencies such as Bitcoin and Ethereum, and plans a broad criminal crackdown on illicit activities in the crypto world. In recent weeks, crypto-related criminal activity has been making national headlines, particularly with the cyberattack on the Colonial Pipeline in May that resulted in the days-long shutdown of the country’s largest fuel pipeline. Russian hackers were behind the move and they demanded $5 billion in ransom money, which was paid by Colonial’s CEO in bitcoin.
The FBI ultimately recovered around half of the money by seizing a so-called digital wallet that contained the ransom. Last year, the DOJ seized $1 million in crypto assets from the now-defunct Silk Road marketplace, one of the most notorious criminal digital-currency black markets in existence.
Aside from criminal activities, both the Securities and Exchange Commission and the Treasury Department are monitoring the hype surrounding Bitcoin and other digital currencies and whether small investors are being misled to buy cryptocurrencies, which have no immediate inherent value. Digital currencies are used when transacting business through blockchain technologies, but the industry is nascent and has yet to gain broad acceptance as a tool to transact business.
“There’s absolutely nothing you can do with Bitcoin – it doesn’t have a characteristic of a commodity, it doesn’t have the characteristics of an asset, so it’s just a token, a speculative token,” says crypto skeptic Peter Schiff, chief economist and global strategist at Europac. “Right now people want to collect it because they don’t really understand it”.
The price of Bitcoin, though significantly off its highs from April has had a pretty impressive run–up in the last year, surging above $60,000 before crashing back down to $30,000 earlier this month. Early this week, it briefly fell below $30,000. Ethereum’s performance is even more eye-popping – the asset up nearly 700% over the last year, though it has traded off as well falling to below $2,000 from just over $4,000 in May.
Top regulators such as Treasury Secretary Janet Yellen and SEC Chairman Gary Gensler have stated publicly that they think cryptocurrencies need to be more closely regulated even though Gensler notably left off cryptocurrencies out of the SEC’s spring rule-making agenda, giving precedent to more polarizing matters such as climate change and diversity disclosures.
People close to the SEC say Gensler and the commission are grappling with how best to regulate a business that operates outside the banking system.
“The government will inevitably attempt to regulate crypto because this administration’s solution to every problem is simply to increase regulation,” says Charles Enson, a law professor at the University of Delaware. “The big question will be ‘How?’ It’s easy to say but tough to do.”
Still, many crypto experts think more stringent regulation is just around the corner. One reason, according to Michael Oliver of Momentum Structural Analysis, is that the increasing investor appetite for cryptocurrencies could pose a threat to government monetary policy since the Federal Reserve has no role in the creation of Bitcoin and other popular digital currencies.
“Momentum Structural Analysis had predicted in reports beginning in September 2020 onward that governments and central banks would crackdown on private money and cryptos as the growing acceptance of such money was implicitly a threat to central bank monopoly control over their monies,” Oliver said. “Hence a threat to their policy implementation.”
Schiff, too, echoed these sentiments.
“It’s being marketed as a competitor to government-issued money”, Schiff said. “So obviously the government doesn’t like competition, especially when you’re competing with it…so it makes sense that they’re going to regulate it.”
Meanwhile, on the world stage, global regulators have been closely scrutinizing cryptocurrencies over the past few weeks. Most recently, China’s central bank ordered state-owned banks and payment provider Alipay to cut off all transactions related to Bitcoin. South Korea just confiscated $47 million in crypto assets in an effort to crackdown on tax evasion.
Here in the U.S., the DOJ’s crypto task force known as the Digital Currency Initiative was established in 2018. The unit was created following then-special counsel Robert Mueller’s indictments against Russian Intelligence officers using cryptocurrencies in their efforts to interfere in the 2016 U.S. Presidential election.
The Justice Department did not respond to our request for comment on this story.