Rod Rosenstein spoke at the Financial Services Roundtable’s spring conference this week before being asked about his views on cryptocurrency and cybercrime.
Amid his remarks, he referred to the new cybercrime task force which was unveiled by the Department of Justice last week.
He said: “A lot of these schemes involve bitcoin and other cryptocurrencies which do not flow through the traditional financial system.
“So what we’re working on now with our cybercrimes task force within the department is an effort to develop a comprehensive strategy to deal with that.”
The task force features representatives from a range of law enforcement agencies including the FBI, the US Marshals Service, and the Drug Enforcement Agency.
During an “ask me anything” on Reddit yesterday, Microsoft founder Bill Gates criticised cryptocurrencies for anonymous payments, saying it propagates the deadly drug trade.
Rosenstein dismissed the idea that cryptocurrencies are fully anonymous.
He said laundering process leaves clues for federal investigators to follow to the source, making them pseudonymous.
Speaking of tracing criminal activity, he said: “Generally speaking, it’s not just about cyber activity.
“There will be other ways that people will leave trails.
“Ultimately, even when dealing with cybercurrency, they’re going to want to convert, launder it into physical currency, and so there are ways to trace these operations.”
A key element of the Justice Department’s efforts will be educate federal officials on the ins and outs of the technology so they can enforce strategies and follow digital trails.
Rosenstein, facing a caucus filled with American bankers, continued: “One of the challenges we have in law enforcement is making sure our employees are fully skilled, so that’s one of our challenges, to make sure we have the agents and the prosecutors with the skills and the expertise.
“The criminals will always be one step ahead.”
The US is not alone in looking at how to tackle cryptocurrency crime.
The finance minister and Central Bank Governors of France and Germany have requested that talks on policy and monetary implications of cryptocurrencies be part of the agenda for March’s G20 meeting.
The officials put forward their request in a letter to the finance minister of Argentina, who currently hold the G20 presidency.
They said: “We believe there may be new opportunities arising from the tokens and the technologies behind them.
“However, tokens could pose substantial risks for investors and can be vulnerable to financial crime without appropriate measures.
“In the longer run, potential risks in the field of financial stability may emerge as well.”