The Department of Justice is starting to take crypto crime seriously and has created a new National Cryptocurrency Enforcement Team, the agency announced Thursday. It has appointed Eun Young Choi as its first director.
Who is Eun Young Choi?
She’s been working in Washington since last April, as senior counsel to the deputy attorney general, but has been a federal employee since 2012, having spent over nine years as the cybercrime coordinator at the U.S. attorney’s office for the Southern District of New York.
As cybercrime coordinator, Choi investigated money laundering schemes and online fraud, with many of her cases focusing on digital currency, the dark web, and network intrusions. According to a DOJ statement announcing Choi’s appointment on Thursday, she has been a prosecutor in cases involving illicit virtual currency exchanges, and attempts by large hacking groups to access the accounts of major U.S. banks and financial institutions.
Choi will become the inaugural director of the National Cryptocurrency Enforcement Team (NCET), effective immediately, as regulators attempt to clamp down on what have so far been largely unmonitored crimes.
“Because of the nature of the jurisdiction and the laws involved, [crypto crimes] are barely prosecuted crimes,” Todd Raque, financial crimes and money laundering expert at Featurespace, a fraud prevention technology provider, told Fortune. “I think the DOJ unit will be a focal point to help make sure there is a more coordinated effort across agencies.”
Assistant Attorney General for the DOJ’s Criminal Division Kenneth A. Polite Jr. emphasized Choi’s background dealing with cybercrime and crypto theft as the reasons behind her appointment.
“Eun Young is an accomplished leader on cyber and cryptocurrency issues, and I am pleased that she will continue her service as the NCET’s inaugural director, spearheading the department’s efforts in this area,” Polite said.
What department is she leading?
The NCET is being tasked with ensuring that it “meets the challenge posed by the criminal misuse of cryptocurrencies and digital assets,” according to the DOJ.
The team will focus on cases related to “entities that are enabling the misuse of cryptocurrency and related technologies to commit or facilitate criminal activity,” such as virtual crypto exchanges and other digital infrastructure that allows users to commit crypto fraud or theft.
“The NCET will play a pivotal role in ensuring that as the technology surrounding digital assets grows and evolves, the department in turn accelerates and expands its efforts to combat their illicit abuse by criminals of all kinds,” Choi said upon her appointment.
The NCET will also coordinate with other federal agencies and the private sector to protect against crypto fraud, a measure Raque believes to be critical.
“It’s a big issue,” he said. “There have been fragmented approaches and siloed efforts. I think between public-private and public-public partnerships, we have an opportunity to coordinate and work together, and that is the benefit of having these teams.”
More crypto crime than ever
As more people are becoming involved with cryptocurrency than ever before, cybercrime and online theft are on the rise. Around $14 billion in cryptocurrencies related to illicit activities was stolen in 2021, according to a January report by blockchain analytics firm Chainalysis. The vast majority of these funds were taken through online scams.
Crypto scams are permeating social media, as new decentralized and unregulated applications are making it easier for hackers to move into blockchain services and transfer cryptocurrency through fake accounts.
Scammers who rely on bots have also been raking in hundreds of millions, and possibly billions, of dollars over the past year.
While hacking collectives and criminal organizations pose some of the biggest concerns to the DOJ, some individual scammers have also been accused of major crypto crimes. A Manhattan couple were accused last week of laundering $4.5 billion worth of Bitcoin over the past several years, of which $1 billion still remains unaccounted for.
More crypto agencies to follow
Director Choi and her newly formed team of prosecutors at the NCET is not the only government agency pivoting towards crypto crimes. In director Choi’s appointment statement, officials also announced that the FBI is setting up a new Virtual Asset Exploitation Unit, which will provide cybercrime and crypto theft analysis, support, and training across the bureau and build better tools to protect the country from hackers.
Raque believes that the DOJ’s and FBI’s announcements are “in line with the strategies that have been released over the last couple of months by the Biden administration,” adding that “this is an effort that’s been underway for the last couple of years, and you’re starting to see it come to fruition.”
The DOJ’s and FBI’s new units have come as U.S. regulators have signaled more serious crackdowns and scrutiny of the cryptocurrency industry after cyber intrusions on a U.S. pipeline and a meat supplier last year. Both hackers demanded ransom be paid in Bitcoin.
