Find Here, How Federal Law Enforcement Define Crypto Regulation

• The Federal Law Enforcement depicted the vital role in developing digital asset regulatory guidance.
• It explained that its enforcement efforts are battling the abuse of digital assets.

The Federal Law Enforcement in the United States emphasizes adherence to compliance guidelines. In a conference, hosted by the American Bar Association, leaders in the digital asset crime enforcement space, Dallas Woodrum, the Section Chief at the Treasury Department’s Office of Foreign Assets Control, spoke about some of the decentralized finance technologies which they are supervising.

Mr. Woodrum detailed as “From our perspective, when it comes to virtual currency and digital assets, a particular concern is making sure that we track and we disrupt the use of visual assets and virtual currency to evade our sanctions.”

He also noted “What we don’t want is virtual currency, NFTs and other digital assets to be used as a means to evade our sanctions and to transfer funds that would be prohibited.”

Mr. Woodrum further pointed that his office is tempering its enforcement against sanction evasions through cryptocurrency with authorized transactions. He noted that OFAC does not want to hinder tech innovation in the digital asset sector, as he stressed “We are focused on sanctioned persons, criminals, malicious actors that seek to abuse our digital assets to evade our sanctions programs.”

Additionally, in a recent executive order and subsequent strategy documents, President Biden has pledged to support development of cryptocurrencies and to restrict their illegal uses.

However, earlier this year, the Treasury officials made headlines by following the sanctioning of online digital currency mixer Tornado Cash. This sanction resulted from the platform having laundered around $7 Billion in virtual currencies and assets since its invention in 2019. 

Mr. Woodrum said over this as a major component of his office’s enforcement efforts is working in tandem with the private sector to promote the growth with new federal guidance. 

He states “We aim at engaging with the private sector in order to identify where guidance is needed. We’ve taken significant actions in the last couple of years to sanction a number of entities where they’re using virtual currency for illicit activities.” 

On the other hand, Eun Young Choi, the Director of the National Cryptocurrency Enforcement Team at the U.S. Justice Department, came with her concern over crypto mixers. As she added, the sanctions and other enforcement tactics are more of a last resort in digital asset regulation. 

In continuation to develop the agency’s tracing and asset seizure capabilities, she said working alongside private sector companies to encourage compliance with regulators is the department’s preferred method.

Choi said “We really do think that the key to cleaning up the digital asset ecosystem and rid it of abuse is to work hand in hand and rely on our private sector actors.”

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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