Information, AML/CFT steps are key to fighting international digital crime, DOJ report says

The United States Department of Justice (DOJ) released a report on international law enforcement related to digital assets on Tuesday. It is the first of the approximately one dozen reports mandated in President Joe Biden’s March 9 executive order “Ensuring Responsible Development of Digital Assets.”

The report, titled “How To Strengthen International Law Enforcement Cooperation For Detecting, Investigating, And Prosecuting Criminal Activity Related To Digital Assets,” was written with the collaboration of the Departments of State, Treasury and Homeland Security, as well as the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC).

Countries have varying degrees of capacity to deal with criminal activity due to the unique law enforcement challenges associated with the nature of digital asset transactions, such as their anonymity and ability to cross borders instantaneously, the report said. It listed money laundering, ransomware activities, cybercrime, fraud, theft, terrorist financing and sanctions evasion among the criminal activities in question.

Weak Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) enforcement, limited legislative frameworks and lack of expertise in the face of an evolving threat landscape are also impediments to effective transnational crime-fighting efforts.

Information sharing is a key component in international enforcement efforts, but effective information sharing among U.S. agencies is needed for international efforts to succeed, the report noted, and a whole-of-government approach increases law enforcement effectiveness overall. The United States has entered into several agreements and organizations, such as the Financial Action Task Force (FATF) and the International Organization of Securities Commissions (IOSCO), to improve information sharing.

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The report’s recommendations are largely for more of the same cooperation and information sharing. It is particularly detailed in addressing the need for greater AML/CFT regulation. Criminal actors are able to take advantage of jurisdictional arbitrage, the report noted:

“Encourage partners to examine and weigh the reputational and national security risks and policy implications associated with allowing certain virtual assets businesses to operate within their borders.” 

Numerous U.S. agencies have international training and outreach efforts that contribute to international crime fighting.