Cryptocurrency has increasingly become an accepted form of financial exchange. However, it has also become a favored form of payment for cyber criminals.
In an effort to deter the use of cryptocurrencies in furtherance of criminal activity, the Federal Bureau of Investigation recently announced the formation of a Virtual Asset Exploitation Unit (VAXU). The VAXU will combine various investigatory, technical, and analytical resources, and the unit is charged with tracking the illicit use of cryptocurrencies and assisting in their seizure. This announcement follows close on the heels of the recent U.S. Department of Justice appointment of veteran federal prosecutor Eun Young Choi as the first director of the newly-created National Cryptocurrency Enforcement Team (NCET).
In the past, it has proven difficult for law enforcement to track the use of illicit cryptocurrencies. The formation of VAXU serves to address and alleviate this issue, and while significant law enforcement resources are being devoted to this new initiative, both DOJ and the FBI must work to strengthen their partnerships with private businesses, who will be relied on to report the use of cryptocurrency in connection with criminal activity.
The use of cryptocurrency for both legitimate and illegal activities continues to grow unabated. It is estimated that over 300 million people in the world own cryptocurrency, and over 18,000 businesses now accept cryptocurrency as payment. On the illicit side, almost 80% of all ransomware payments are made via cryptocurrency, and it is estimated that cryptocurrency payments for ransomware attacks exceeded $20 billion in 2021.
The creation of the VAXU is an acknowledgement that cryptocurrency plays an integral role in criminal activity and that additional resources are needed in order to ensure that cryptocurrency does not continue to fuel cyber or conventional crimes going forward.
