IRS Cultivates Crypto Links to Fight Fraud

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The Internal Revenue Service (IRS) is stepping up its efforts to combat fraud in the cryptocurrency industry.

The Wall Street Journal (WSJ) reported on Tuesday (January 3rd) that the IRS Criminal Division (IRS-CI) adds hundreds of new officers each year, assigns many to focus on digital assets and cybercrime, and cultivates cooperative efforts with the crypto industry.

This is a new industry for everyone, Thomas Fattorusso, the special agent in charge of the IRS-CI field office in New York, told the WSJ. I think we’re still trying to work our way around that. Companies fumble around this.

According to the report, crypto companies that partner with the IRS-CI in these efforts because they find it bolsters their legitimacy.

The IRS-CI also welcomes the revolving door between industry and government, as it builds the technical knowledge of talent and facilitates ongoing communication between business and law enforcement, according to the report.

They gain experience and they bring that experience wherever they go, Fattorusso said, according to the report. And if they report it to us in law enforcement or if they help us when they’re on the private side, that only helps us.

The IRS is one of many government agencies that have focused their attention on the crypto industry.

For example, the Securities and Exchange Commission (SEC) announced in September that it would add a Crypto Assets Desk to its Corporate Financial Disclosure (DRP) review program.

The new office will carry out the work currently being done across the DRP to review filings involving cryptocurrencies and help focus crypto-related resources and expertise, the SEC said Sept. 9.

In the same month, the Department of Justice announced that it had created a network of Digital Asset Coordinators (DACs) which includes prosecutors responsible for its crypto investigations and prosecutions and coordinates these efforts with more than a dozen law enforcement teams.

The DAC will ensure that the Department and its prosecutors are in the best position to combat the ever-changing criminal uses of digital asset technology, Assistant Attorney General Kenneth Polite Jr. said Sept. 16.

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