The DOJ’s National Cryptocurrency Enforcement Team and Treasury’s OFAC are setting their sights on cryptocurrency use in cybercrimes.

By Benjamin A. Naftalis, Eric S. Volkman, Douglas K. Yatter, Nima H. Mohebbi, Jessie R. Michelin, and Deric Behar

The US Department of Justice (DOJ) is sharpening its focus on combatting cryptocurrency use in criminal activity. On October 6, 2021, the DOJ announced the creation of a National Cryptocurrency Enforcement Team (NCET) — a unit aimed to be the centerpiece in “a nationwide enforcement effort to combat the use of cryptocurrency as an illicit tool.” The DOJ identifies cryptocurrency as the “primary demand mechanism for ransomware payments” and “preferred means of exchange of value” to facilitate crimes on the dark web. The stated purpose of NCET is to conduct complex investigations and prosecutions of criminal misuse of cryptocurrency by individuals and entities operating in the digital asset space.

Underlying NCET is the DOJ Cyber Digital Task Force’s first published report, which highlighted the need to address threats posed by the use of cryptocurrency in cybercrimes, as well as its October 2020 Cryptocurrency Enforcement Framework (the Framework), which highlighted the emerging threats and enforcement challenges posed by cryptocurrency use and infrastructure abuse. In the Framework, the DOJ asserted broad and diverse jurisdiction over crimes involving cryptoassets to pursue violations of US law even if those violations were conducted by individuals or entities based outside the US, so long as those entities maintained a nexus of activity involving US persons (see this Latham post for more information).

The Abu Dhabi Global Market’s Guidance clarifies and expands FSRA expectations for OCAB Framework license holders.

By Brian A. Meenagh

In June 2018, the Abu Dhabi Global Market (ADGM) Financial Services Regulatory Authority (FSRA) unveiled a dedicated cryptoasset regulatory framework by way of various amendments to the FSRA’s core regulations — the Financial Services and Markets Regulation (FSMR), as well as supplementary guidance thereto.

In May 2019, the FSRA issued updated and greatly expanded guidance (FSRA Guidance) that includes a more granular level of detail and addresses a range of topics not covered in the initial guidance. This blog will consider some of these topics in more detail.