FBI to Launch Crypto Crimefighting Unit

The Department of Justice (DOJ) announced on Thursday, Feb. 17, that the Federal Bureau of Investigation (FBI) is forming a new specialized team dedicated to tackling growing cryptocurrency crimes.

The division called the Virtual Asset Exploitation Unit (VAXU) will include crypto security experts who conduct blockchain analysis to track and seize digital funds associated with illicit activity. It will also innovate its own crypto tools to guard against future cyber threats.

DOJ Ramps up Crypto Surveillance

The creation of the unit comes after the DOJ charged a New York couple earlier in February for laundering Bitcoin tied to a 2016 hack of popular digital currency exchange Bitfinex. Law enforcement officials seized $3.6 billion of the stolen funds in the department's largest-ever financial seizure. The major coup was the DOJ's first since launching its own crypto enforcement unit at the end of last year, comprising about a dozen anti-money laundering (AML) and cybercrime experts.

As part of an address to the Munich Cyber Security Conference, Deputy Attorney General Lisa Monaco announced that seasoned cybercrimes prosecutor Eun Young Choi would lead the Justice Department's National Cryptocurrency Enforcement Team (NCET), effective as of Feb. 17, 2022.

Monaco also said that an international virtual currency initiative would be established to facilitate joint global law enforcement collaboration and improve techniques and abilities in cryptocurrency investigations.

Prior to the formation of NCET, a government task force seized more than $2 million in digital assets used as ransom following a cyber-attack on the United States' Colonial Pipeline system that affected computerized equipment managing the strategically important infrastructure.

Increasing Collaboration

Both teams will work closely to investigate crimes involving cryptocurrencies. "Ransomware and digital extortion, like many other crimes fueled by cryptocurrency, only work if the bad guys get paid, which means we have to bust their business model," Monaco said. "The currency might be virtual, but the message to companies is concrete: if you report to us, we can follow the money and not only help you but hopefully prevent the next victim," she added.

According to blockchain analysis company Chainalysis Inc., criminals held $11 billion worth of funds with known illicit sources at the end of 2021, up substantially from $3 billion at the end of 2020. Monaco said that the FBI is currently investigating over 100 different ransomware variants and targeting cyber criminals estimated to have caused victims significant losses.