The United States Attorney General’s Cyber-Digital Task Force recently unveiled the result of its months-long effort to evaluate emerging cryptocurrency-related threats and articulate law enforcement strategies for countering them. The resulting guidance leaves the reader with an impression that its authors have a sound understanding of how the focal asset class works as well as a certain fixation on the ways it can be misused, as some observers contend.
In the highly charged atmosphere of the final weeks before the presidential election, with high-profile enforcement actions against the people behind crypto derivatives exchange BitMEX and the U.S. government’s sweeping anti-monopoly push against Silicon Valley looming in the background, the Cryptocurrency Enforcement Framework seems like part of some larger political and regulatory dynamic. How does the release of the document fit into the grand scheme of things, and what message is it meant to convey?
Timing and context
One reason why even a modest uptick in enforcement activity in the digital asset space can feel like a full-blown clampdown is that U.S. government agencies have so far been rather selective when deciding whether or not to go after unscrupulous crypto actors.
The lack of specific regulations, as well as the infamous confusion as to which regulatory body is taking point, has left a general strategy of stepping in only to prosecute the most egregious cases, as opposed to blanket enforcement. The DoJ’s introduction of the Crypto Enforcement Framework could suggest that the tide is turning.
Andrew Hinkes, co-founder of consultancy Athena Blockchain and an attorney at law firm Carlton Fields, sees the report as mainly a recap of law enforcement efforts in the blockchain space over the past six years, however, one that indicates a clear upward trend:
“Different federal agencies mentioned in the report, such as the SEC, CFTC, and FinCEN, have all been steadily increasing their regulatory and…