Don't think I've seen this covered yet here, or at least not in a dedicated thread, so figured I'd give this a mention.
Apparently, The US Department of Justice recently published a report authored by the Attorney General's (yep, ATS alternating hero/villain AG Barr)
"Cyber Digital Taskforce" that is to describe an "enforcement framework" that law enforcement agencies can use to identify and crack down on
"illicit" use of cryptocurrencies.
I perused it briefly (it is rather lengthy), and I didn't notice anything shocking, in terms of planned changes to laws or new methodologies to
regulate crypto coins, but I didn't go over it with a fine-tooth comb, so there may be some surprises in it.
The content of the doc is broken down as thus:
Section 1 - Threat Overview - "crypto currency for dummies" description of how they work, description of legitimate and illegitimate uses for crypto
Section 2 - Laws and Regulations - various codes and legal restrictions that pertain to exchanging crypto currency, i.e. various different wire fraud
and laundering codes that can be used to prosecute folks handling cryptos as part of "illegitimate uses" outlined in section 1
Section 3 - Ongoing Challenges and Future Strategies - list traits and features of crypto coins that make transaction tracking difficult for
authorities (e.g. altcoins with built-int anonymity measures, tumbling/mixing coin transactions etc)
A few interesting tidbits to me:
1. In section 1, various enforcement operations, seizures, investigations, darknet market "stings" and major arrests are chronicled. It includes
both US domestic ~~and~~ international cases. Of course mainly it's US alphabet agencies driving the raids, with cooperation and assistance from
other US allied nations (UK, EU, etc)
2. The document goes to great lengths to enumerate the ways terror organizations and criminal enterprises operate using crypto currency for financing
terror operations, masking large-scale corporate and high-asset financial fraud and money laundering, state level (e.g. Iran, N. Korea) maneuvers to
avoid sanctions, and it equates with very little or no distinction, "small fish" users of crypto coins buying illicit items on the black
. So essentially, unless you are more or less investing/and/or buying/holding crypto currencies through large, registered and well-known
coin exchanges....look out.
3. I believe that US enforcement agencies will in the future begin a wide-spread and thorough effort to makes sure every single transaction for
cryptos is moving through a major exchange (e.g. Coinbase) such that it'll be very difficult to use these currencies without a detailed "paper
trail" of who is exchanging what and for how much. But you might say "well coin 'tumblers/mixers' can help make transaction anonymous", and there
are also certain alt-coins that are distributed, P2P and have countermeasure for identity tracking built into the currency system (e.g. Monero, Dash)
to make tracing very difficult to near impossible. Based on the tone of this document, it's my belief that legislation and enfocrement initiatives
will at some point be launched to ban and prosecute usage of tumbler/mixer services or certain alt-coins that are expressly designed to mask
identity of those using it
Like anything else, the authorities cannot police every single little act taken by the public, so there will be degrees IMO of the breadth and depth
that efforts are made to enforce any laws made, particularly in point 3 about coin tumblers and anonymity-oriented altcoins. That said, I truly think
that there are plans afoot to crack down on crypto currency to a level we've never seen. Authorities and many governments internationally are going
to ramp up their efforts to start bringing this industry "out from the shadows". That means ensuring everybody, ANY significant vendor who transacts
in crypto currency will need to register, and likely demonstrate that they have a system where any arbitrary client's transactions can be traced back
If you are engaging in activities designed to mask/obfuscate/hide transactions by "tumbling", it's my feeling that those operations, at least large
scale ones will be targeted and dismantled.
If you are designing, implementing and launching a new type of alt-coin that is meant to dodge registration and identification measures, IMO you will
be targeted, and this would include software developers, cloud and hosting services, anyone who is involved with such R&D at least if it becomes an
actual profitable business. If they can't break your cryptographic capabilities, find a bug in the system or otherwise circumvent the system's
anonymity features, I believe they will just assume it's being used for nefarious activities, and they will go after the creators and those actively
There is also the consideration of TOR and other so-called "onion routing" technologies that by design are able to conceal crypto-related "hidden"
services/domains, hide users' IP address and true geographical location. I would just remind you that the TOR network was itself funded, researched,
designed by the US DARPA
, and there have been many suggestions that US government has
means of "de-anonymizing" traffic and back-doors in place (mostly involving special "exit nodes" at the end of the TOR network topology) to allow
them to trace traffic back to its source, if it wishes. TL;DR I wouldn't just assume that anonymity services like TOR will protect me if I'm trying
to countermand/skirt any new laws or investigations related to "illicit use" of crypto currency. Also, don't forget, the FBI, DEA and other
agencies have demonstrated a proclivity and very successful track record of infiltrating, impersonating, gathering user data and then seizing/raiding
any operation they deem as a threat or as breaking US or international laws WRT use of crypt currencies for laundering, buying drugs/weapons/false
IDs, blackmail, etc.
At any rate, if you invest in crypto currencies, give this a read. Hopefully this won't disrupt those that are truly investing in crypto currencies
as a security/hedge, but IMO this is a rather ominous and foreboding sign that US and others will soon embark on a "War on Cryptographic Currency",
like the "War on Drugs", "War on Terror", etc etc