US agencies unite to create Mini-FBI for dark web cryptocurrency crime.

The United States government has formed a new task force to focus on crypto crime. The task force consists of five investigators from various federal agencies. Established on June 15th, the “Darknet Marketplace and Digital Currency Crimes Task Force” aims to disrupt and dismantle criminal organizations that use digital currencies to enable drug trafficking, money laundering, and other illegal activities. The task force will initially operate in Arizona.

According to a press release from the U.S. Immigration and Customs Enforcement website, “As these criminal activities and enterprises have become more sophisticated, law enforcement tools, resources, and intelligence have had to adapt.”

The task force is made up of agents from the Department of Homeland Security, IRS Criminal Investigation Unit, U.S. Drug Enforcement Administration, Department of Justice, and U.S. Postal Inspection Service. All five agencies have conducted numerous criminal investigations related to cryptocurrency. Cryptocurrency is increasingly used as a tool to bypass traditional financial system checks and balances, which has led to its growth as a tool for illegal activities.

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Last year, the Department of Justice reclaimed $3.6 billion in Bitcoin that had been stolen from crypto exchange Bitfinex in 2018, marking its largest financial seizure in history. Later that year, the department seized 50,000 Bitcoin linked to Silk Road, a now-defunct darknet marketplace that facilitated transactions for drugs, weapons, and other illegal items.

DEA Special Agent in Charge Cheri Oz stated that “Drug traffickers who are hiding in the darknet will be aggressively targeted and unmasked by this task force.” IRS-CI Special Agent in Charge Al Childress also noted that his unit is “increasingly dedicating more investigative time and agent expertise to tackle darknet and cryptocurrency crimes.”

While the amount of money stolen through cryptocurrency-related crimes is growing each year, its share of the absolute total of crypto-related transactions continues to fall, according to Chainalysis data. Furthermore, the US Treasury Department confirmed in a risk assessment report last year that digital assets are still used far less for money laundering than fiat currency. However, the Treasury also noted “national security” risks related to the decentralized finance (DeFi) ecosystem in April, as it can also be leveraged by “thieves” and “ransomware actors” to launder their proceeds.