U.S. Deputy Attorney General Lisa Monaco announced the formation of the Virtual Asset Exploitation Team (VAXU) during a speech at the Munich Cyber Security Conference this week, saying the unit will help the U.S. government to keep pace with “threat actors who exploit innovations as fast as the marketplace produces them.”
This includes “the explosion of ransomware and the abuse of cryptocurrency,” Monaco added, noting that the FBI is currently tracking more than 100 different ransomware variants. Chainalysis reports that scammers wiped over $7.7 billion in cryptocurrency from victims globally in 2021, an increase of 80% compared to the previous year.
The FBI’s VAXU unit will combine cryptocurrency experts, blockchain analysis and virtual asset seizure in one place to work investigations and provide training to the rest of the FBI. The specialized unit will form part of the National Cryptocurrency Enforcement Team (NCET), a division of the U.S. Justice Department created in late-2021 to investigate the criminal use of digital assets, with a particular focus on virtual cryptocurrency exchanges and other technologies that enable the misuse of cryptocurrency or facilitate criminal activity.
“Ransomware and digital extortion, like many other crimes fueled by cryptocurrency, only work if the bad guys get paid, which means we have to bust their business model,” said Monaco. “The currency might be virtual, but the message to companies is concrete: if you report to us, we can follow the money and not only help you but hopefully prevent the next victim.”
Monaco also announced this week that Eun Young Choi, a federal prosecutor with experience in arraigning cybercriminals, has been appointed the first director of the NCET.
“The NCET will play a pivotal role in ensuring that as the technology surrounding digital assets grows and evolves, the department in turn accelerates and expands its efforts to combat their illicit abuse by criminals of all kinds,” said Choi.
The announcement comes just weeks after the DOJ seized over 94,000 bitcoins, currently valued at $3.6 billion, that were allegedly stolen in the 2016 hack of crypto exchange Bitfinex, marking the “largest ever” financial seizure by the department.