June 7, 2022:

 In response to President Binden's Executive Order on Digital Assets, the DOJ has released their comprehensive report. Link

Key takeaways from the DOJ's Report in Response to the President's Executive Order on Digital Asset Regulation. TLDR: Strong international coordination and swift action on intel are critical to fighting digital asset crime (1) Strengthen & Expand U.S. Law Enforcement Operational Capacity-Building Efforts with Foreign Law Enforcement Partners: DOJ believes that "U.S. law enforcement abilities would be significantly improved by expanding its overseas operational capacity (as opposed to training) to combat malicious criminal threats, particularly related to cybercrime and illicit misuse of digital assets." DOJ also reports that "efforts to enhance the United State's ability to detect, investigate, prosecute and otherwise disrupt the illicit use of digital assets would be more effective if funds for international capacity building were allocated to international law enforcement partners including those that the DOJ, as lead domestic law enforcement agency, has identified based on specific operational needs. 

Deepen Information Sharing, Early Coordination, and Deconfliction Efforts: DOJ believes "international law enforcement efforts should be strengthened by developing more effect means of coordination across law enforcement partners"

Report recommends: (1) "encourage information sharing, early coordination, and deconfliction of investigations across domestic and International law enforcement partners, to promote faster and more efficient coordination of criminal investigations involving digital assets" (2) "Support efforts to further international cooperation on the preservation and collection of records and evidence relating to crimes involving digital assets" (3) "Continue to provide policy support and subject matter expertise to International partners in areas of digital assets and associated emerging technologies." (4) "Foster cooperation and partnerships with private sector entities operating in the digital asset space--both domestically and abroad--who seek to be responsible actors in the ecosystem"

Address Jurisdictional Arbitrage Through Closing Gaps in AML/CFT Regulation and Supervision. "Deficient AML/CFT regulatory and supervisory regimes in many jurisdictions present an opportunity for criminal actors to engage in jurisdictional arbitrage, purposely seeking to further their criminal activities in such jurisdictions." To minimize the opportunities the DOJ proposes: (1) Continue to work through the FATF's (Financial Action Task Force) Virtual Asset Contact Group to encourage and support countries implementing FATF recommendations (2) Continue to engage bilaterally with countries to explain the FATF recommendations, understand challenges to implementation, and support countries in overcoming those challenges

Encourage partners to examine and weigh the repetitional and national security risks and policy implications associated with allowing certain virtual assets business to operate within their borders, especially those that brand themselves as "headquarter-less"

'Conclusion: DOJ believes that "strengthening international law enforcement cooperation for detecting, investigating, prosecuting, and otherwise disrupting criminal activity related to digital assets is vital to the mitigation of illicit finance and national security risks posed by the misuse of such assets. Timely coordination and information sharing is essential to combat the growing use of digital assets to facilitate criminal activity ..."