Crypto Crime Is a Focus of Trump’s New Task Force on Consumer Fraud
In forming a new task force to protect consumers from fraud, the Trump administration made clear that one of the greatest threats to the public is just emerging: red-hot markets for crypto coins.
The inclusion of virtual tokens — along with traditional crimes like money laundering and investment schemes targeting the elderly — as a focus of a panel announced Wednesday is the latest sign of Washington’s concern over digital currencies.
The Justice Department, the Securities and Exchange Commission and the Commodity Futures Trading Commission are increasingly focusing their resources on scams tied to Bitcoin and other tokens, and government officials have frequently warned investors about potential dangers.
The new task force is led by the Justice Department and consists of agencies including the SEC, the Federal Trade Commission and the Consumer Financial Protection Bureau, according to an executive order signed by President Donald Trump. It cited “cyber fraud” and “digital currency fraud” as targets of the group’s work.
While the Obama administration formed a similar task force in the wake of the 2008 financial crisis, Trump’s decision to create his own version allows his administration to direct its focus. In his executive order, Trump tasked the group with providing guidance for investigations and with recommending how to improve cooperation among various government agencies.
“Fraud committed by companies and their employees has a devastating impact on American citizens in the financial markets, the health care sector, and elsewhere,” Deputy Attorney General Rod Rosenstein said at a press briefing in Washington.
In potentially good news for corporations, Rosenstein added that agencies would seek to better coordinate their various probes to avoid “piling on,” or assessing several fines on a single company for the same violation. He said the goal is to give firms an incentive to cooperate with investigations and voluntarily report misconduct.
The move jibes with comments Rosenstein made in May when he said that the practice of hitting corporations with multiple enforcement actions “can deprive a company of the benefits of certainty and finality ordinarily available through a full and final settlement.” He’s also questioned the value of corporate penalties in deterring wrongdoing by individuals.
The creation of the task force comes as the Trump administration is moving to overhaul the CFPB, an agency formed after financial crisis to better protect people from predatory mortgage lending and abusive credit card contracts. The CFPB has become one of the most politically divisive agencies in Washington, hailed as a regulatory crown jewel of consumer protection by Democrats while maligned by Republicans as a bastion of government overreach.
By Benjamin Bain and David McLaughlin
July 11, 2018 12:18 PM EDT