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IRS sees crypto companies as potential crime-fighting partners

cryptocurrency is here to stay,” said a senior law enforcement official for the Internal Revenue Service, and the tax agency wants to work with the industry to fight financial crime.

The IRS’s criminal investigation division hires hundreds of new agents each year, including many assigned to work on digital assets and cybercrimes, said Thomas Fattorusso, the special agent in charge of IRS-CI’s New York field office.

In the alphabet soup of federal law enforcement agencies, IRS-CI hasn’t garnered as much attention as its counterparts at the Federal Bureau of Investigation or the Drug Enforcement Administration. But the 102-year-old law enforcement arm of the IRS — whose agents are sometimes affectionately referred to as “accountants with guns” — is one of America’s top financial crime enforcers, handling cases ranging from money laundering to Russia sanctions. She has also turned to cryptocurrency, as one of several federal agencies trying to grapple with the burgeoning industry.

Mr. Fattorusso, speaking to The Wall Street Journal’s Risk & Compliance Journal, said that IRS-CI, which often competes with the flush crypto sector for talent, welcomes the revolving door — mixing talent between government and industry — as a way to create ties care for. Responses have been edited for clarity and length.

WSJ: How do you view digital assets? Are you willing to work with these companies?

Mr. Fattorusso: We cannot be hostile to technology. We must accept it.

Cryptocurrency is here to stay as far as I’m concerned. It’s not going anywhere anytime soon, and it’s getting more legitimate as the years go by — it’s getting more sophisticated. My thought is that these relationships will develop over the years [as] companies feel more comfortable dealing with the federal government. I don’t see how we can operate in this room without her.

WSJ: Are you getting the level of collaboration and partnership from cryptocurrency companies you want?

Mr. Fattorusso: That’s what we’re always working towards. I can’t tell if we get that or not, but that’s always the end goal, to have those partnerships and have a relationship that isn’t contentious. More of a symbiotic relationship.

It helps them with their legitimacy. This is a new industry for everyone. I think we’re still trying to figure that out. The companies feel their way around it.

WSJ: The digital assets space has some areas that are very technical. Do you have the talent you need?

Mr. Fattorusso: We have been very fortunate, especially in recent years. We’re going through a hiring spurt right now, so we hire several hundred agents each year and we send them through the academy in hopes that they’ll come out and become part of the team of top financial investigators.

But many of them have a technical background. you are younger You grew up in the world of technology. More than I, for example, who didn’t grow up in this world.

Sometimes it is difficult to compete with private companies. But there are those out there who want to devote their lives to ministry, who want to fight fraud, who want to do law enforcement work.

We’ve been very good at hiring data scientists in CI over the last few years, which is brand new for us.

WSJ: As for competition from the private sector, certain federal agencies are known to have a revolving door where talented people work for them and then enter the private sector. Does this happen in your agency?

Mr. Fattorusso: We’re seeing that more often now, especially in the cyber space. We have let some of our cyber agents and managers go to private companies. We find these partnerships beneficial because they understand what we need from a law enforcement perspective to investigate cybercrime. And they can help us in this area. And now we have an open flow or open dialogue that we didn’t have before because we didn’t have contact there.

They’re going to go into the private sector, and they’re going to go back to government and back into the private sector. Nothing wrong with that at all. They gain experience and bring that experience with them wherever they go. And if they bring it back to us in law enforcement or help us if they’re on the private side, that only helps us.

If you are familiar with what goes on in some of these exchanges, you know that our agents are marketable and they get picked up by these various private companies for their work and knowledge. We hope to expand these relationships even further. ‘Okay, you used to work for us here, maybe you can help us with the investigation.’

Authors: Richard Vanderford at Richard.Vanderford@wsj.com

Copyright ©2022 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8

Source: Wall Street Journal

Source: Crypto News Deutsch

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