Federal Law Enforcement Cracking Down on Virtual Financial Crimes

The Government Accountability Office recently reported that federal law enforcement officials in conjunction with financial regulators have expressed growing concerns over the ever-increasing use of digital currencies to perpetrate their crimes.

Virtual currencies like Ripple, Peercoin, and Bitcoin have been used more and more over the last few years by criminals both in an online as well as an offline capacity because they are not issued by governments and can be used for buying goods and services as well as for exchange for real currencies around the world.

The virtual currencies are becoming a favorite of criminals because they provide a very high level of anonymity, especially relative to traditional methods of payment such as credit cards.

This new level of sophistication is making it increasingly difficult for federal law enforcement to track money laundering operations and other financial crimes. The virtual currencies are so new to the world markets that there is no regulatory infrastructure in place to allow for tracking transactions.

To compound the issue, federal law enforcement agencies in the United States have to rely on the help of foreign law enforcement to investigate crimes that involve transactions that were carried out across international borders whether those transactions were online or offline.

Having to rely on foreign agencies for assistance in investigating international financial crimes poses a problem for federal law enforcement in the US because often times foreign agencies can be uncooperative.

There has been significant discussion within the federal law enforcement community recently regarding how to better combat virtual currency crimes. But critics say that there should be more emphasis on federal agencies protecting consumers from financial crimes to which the proponents of federal law enforcement say that is exactly what they are already doing.

Both sides, however, say that there needs to be an increase in interagency cooperation in investigating these crimes and bringing the criminals to justice.