US drug agency failed to properly oversee crypto investigations
It was published in the IG report, which is an audit of “income-generating, undercover operations” – featured the federal government’s key drug controller and frequent cryptocurrency cop as an agency whose efforts to prevent a supposed outburst in digital currency money laundering went ahead of its own ability to monitor itself.
— CoinDesk (@CoinDesk) June 17, 2020
Issues permeated across the DEA’s “Attorney General Exempt Operations,” the IG wrote, but problems were present in its handling of crypto. The DEA’s management of digital currency was inadequate due to improper management from the headquarters, lack of policies, insufficient internal control procedures, poor supervision, and lack of training for digital currency activities.
Some of those problems exhibited in the comparative uniqueness of crypto laundering, which carries with it “unknown fees and spontaneous currency fluctuations” – complex factors beyond the scope of traditional schemes.
But the DEA failed to adapt itself to these new challenges. As per the report, its record-keeping was so inadequate that investigators struggled to match up the transaction data with activities. Even its own agents’ wrong actions did not provoke the DEA into action.
Former DEA agent Carl Mark, Force IV stole $700,000 in bitcoin during the investigation and takedown of the Silk Road dark market. Even after two years, the agency still did not have proper crypto controls.