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The U.S. Department of Justice (DOJ) released the “Cryptocurrency Enforcement Framework” highlighting the emerging threats associated with the frequent and increasing use of digital assets or virtual currencies.

The framework also provides insights regarding the important relationships of regulatory agencies in the United States and around the world as well as the enforcement challenges they face associated with cryptocurrencies. 

This 2020, the Justice Department, the Securities and Exchange Commission (SEC), the Commodity Futures Trading Commission (CFTC), and other federal and state regulators have been very busy investigating an bringing enforcement actions against individuals and entities using bitcoin and other cryptocurrencies in illegal activities.

The DOJ's Cyber-Digital Task Force was responsible for producing the Cryptocurrency Enforcement Framework.

In 2018, then U.S. Attorney General Jeff Sessions established the Task Force to assess the latest technological advances and its impact on law enforcement. Later that year, the Task Force released a  comprehensive report about the existing threats confronting our society ranging from criminal enterprises' cyber-enabled schemes to efforts to compromise the United States' critical infrastructure. The Task Force also identified emergency threats posed by cryptocurrencies since malicious actors are using such assets.

The Task Force produced the Cryptocurrency Enforcement Framework to provide a coherent guideline for those who want to understand the priorities of federal regulators' enforcement in the cryptocurrency industry.

The Cryptocurrency Enforcement Framework 

The Cryptocurrency Enforcement Framework is an 83-page report that begins with the history of “virtual currency” and the potential for abuse. It then acknowledges that these assets are vital to the U.S. and its allies.

“Innovation can drive society forward. But innovation does not occur in a vacuum. Public policy can establish background conditions that help the innovative spirit thrive—or create an environment in which that spirit is inhibited, or suppressed.”

The Task Force noted that the existence of cryptocurrency is "relatively brief" but it already "plays a role in many of the most significant criminal and national security threats" confronting the United States. 

According to the Task Force, the illegal uses of cryptocurrency fall under three categories:

1. financial transactions associated with the commission of crimes;
2. money laundering and the shielding of legitimate activity from tax, reporting, or other legal requirements;
3. crimes, such as theft, directly implicating the cryptocurrency marketplace itself.

The government has tools to combat the illegal use of cryptocurrencies

The report also highlighted the fact the society and the government art powerless to address the threats associated with the illegal use of cryptocurrencies.