Patchwork of Cryptocurrency Regulators Increasingly Stitch Together Cooperative Enforcement …

Crypto currencies are slowly being dragged into the mainstream of banking regulations…:

Recent Enforcement Actions and Guidance from DOJ, FinCEN, and OFAC Demonstrate the Increased Commitment — and Cooperation — of Federal Regulators to Police Digital Currencies, Including Their Use in Ransomware Attacks

Amid the persistent growth in buying, selling, and issuance of digital assets,[i]federal criminal and civil enforcement authorities are becoming more vigilant in their oversight of these growing markets. Often, they are teaming up on cases where their jurisdiction overlaps, especially when criminal conduct is involved.

In a recent reminder of government authorities’ continued interest in policing digital currencies, on November 5, 2020, the Department of Justice (“DOJ”) filed a civil forfeiture complaint seizing thousands of Bitcoins — valued at more than $1 billion — related to the successful prosecution of the founder of Silk Road, an online criminal marketplace that at one point was used extensively by drug dealers and other illicit traders.[ii] The case represents the largest seizure of cryptocurrency in DOJ history.[iii]

The forfeiture action also follows recently announced guidance from DOJ, the Financial Crimes Enforcement Network (“FinCEN”), and Treasury’s Office of Foreign Assets Control (“OFAC”), as well as other enforcement actions, in which regulators have warned the public of the legal and regulatory risks involved in digital asset businesses. Taken together, these developments underscore the increasing focus by federal regulators on cooperatively policing and enforcing illicit cryptocurrency and digital asset transactions.


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