Secret Service Launches Task Force, Coinbase Criticized for Licensing Blockchain Software
The U.S. Secret Service has declared a new task force that merges two existing task forces into one, just as Coinbase Inc. has come under criticism for licensing its blockchain analytics software to the agency. The new Cyber Fraud Task Force connects the Financial Crimes Task Force’s services and the Electronic Crimes Task Force into one combined task force to stop, detect and alleviate cyber-enabled financial crimes to arrest and convict perpetrators. The CFTF model is supposed to provide for improved data sharing, institution alliances, and investigative skills development.
In a press release last Thursday, the Secret Service stated that the declaration came as the agency concentrated its efforts on disrupting and preventing criminal activity that could prevent an efficient response to the COVID-19 pandemic and recovery funds stolen from Americans. “In today’s environment, no longer can investigators effectively pursue a financial or cybercrime investigation without understanding both the financial and internet sectors, as well as the technologies and institutions that power each industry,” the Secret Service stated in a statement. “Nearly all Secret Service investigations make use of digital evidence, and the greater technological sophistication by bad actors has led to a proliferation of blended cyber-enabled financial crimes.”
Security professionals welcomed the declaration. “Cybercrime continues to grow at a rate beyond anybody’s expectations. Approaching this problem in a fragmented way has proven to be less than comprehensive,” Hoffman said in a statement.
“Many other nations around the world have national-level programming focused on cybercrime activity. The benefits from these programs or agencies include things like aggregated threat intelligence across sectors, focused investigations and investigation support, data and attack sharing for prevention, and much more.”
The Secret Service particularly discusses operating with allies, but these days companies working with law enforcement agencies are often criticized. One associate, Coinbase, licensed its blockchain analytics software to the Secret Service in a four-year deal worth $183,750 in May. Chief Executive Officer Brian Armstrong took to Twitter to defend the deal, stating, among other things, that transactions on public blockchains are already traceable even without the company’s software and that there was a requirement to comply with existing laws.
“Exchanges that maintain connections into the existing financial system (i.e., ability to connect your bank account, do wires, etc. so you can convert fiat to crypto) need to follow [anti money laundering] laws and this often includes utilizing blockchain analytics software for transaction monitoring,” Armstrong said in a statement. “There is a lot that could be better about existing AML laws, and we didn’t create them – but those are the rules to operate a fiat to crypto exchange legally.”