Cybercrime task force monitoring the global digital financial system

In an effort to address the growing issue, the U.S. Secret Service merged its Electronic Crimes Task Force and Financial Crimes Task Force into a single unified network dubbed the Cyber Fraud Task Force, with offices in both the U.S. and Europe.

The Cyber Fraud Task Force, or CFTF, was created amid Washington lawmakers supporting legislation that aims to return the Secret Service from within the Department of Homeland Security back to the Treasury Department in order to more effectively investigate cyber-related financial crimes.

The "Cryptocurrency Enforcement Framework" report is the second of its kind issued by the Attorney General's Cyber-Digital Task Force, which was established in February 2018.

The report indicates a shift in the DoJ's perspective in that it recognizes digital assets' several legitimate uses - a far cry from the department's previous perception of cryptocurrency use as a red flag for money laundering and criminality.

In the first part of the report, the DoJ outlines the legal and illicit uses of cryptocurrency and addresses the emergence of the "Next phase of the internet's evolution," known as Web 3.0, which will allow users to have greater control in protecting their digital financial information, transactions and identity from companies and governments.

In conjunction with this, the report indicates that DeFi applications, privacy coins, peer-to-peer exchanges and encrypted dark markets could continue to inhibit legitimate supervision and investigation while simplifying the noncompliance of regulations for Anti-Money Laundering and counter terrorism financing, as set by the Financial Action Task Force.

Currently, the U.S. is part of the Joint Cybercrime Action Taskforce, which collaborates with Europol's European Cybercrime Centre, the European Commission, and the heads of the National Cybercrime Units of EU Member States.

The latter has also established the European Union Cybercrime Task Force to develop and promote a harmonized approach across the EU for tackling cybercrime and the criminal misuse of information and communication technology.

Following a policy study that outlines recent developments regarding crypto assets and addresses key regulatory risks from the increase in digital opportunities within the financial sector, the European Commission published a proposed regulation on digital operational resilience for the financial sector and a new proposed directive that amends certain pieces of existing EU financial services legislation to strengthen resilience in digital operations and provide legal clarity on crypto assets.

The commission published the EU Digital Finance Strategy, which sets out key priorities for digitally transforming the EU's financial sector over the coming years, along with a proposed regulation on a pilot regime for distributed ledger technology market infrastructure.