IRS Cultivating Ties With Crypto Companies to Combat Fraud

The Internal Revenue Service (IRS) is reinforcing its efforts to combat fraud in the cryptocurrency sector.

The Wall Street Journal (WSJ) reported Tuesday (Jan. 3) that the IRS Criminal Division (IRS-CI) is adding hundreds of new agents each year, is assigning many of them to focus on digital assets and cybercrime, and is cultivating cooperative efforts with the crypto industry.

“This is a new industry for everybody,” Thomas Fattorusso, the special agent in charge of IRS-CI’s New York field office, told the WSJ. “I think we’re still trying to feel our way around it. The companies are feeling their way around it.”

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

The IRS-CI also welcomes the “revolving door” between industry and government as it strengthens the technical background of the talent and smooths the ongoing communication between companies and law enforcement agencies, the report said.

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

The IRS is one of several government agencies that have been sharpening their focus on the crypto industry.

For example, the Securities and Exchange Commission (SEC) said in September that it would add an Office of Crypto Assets to its Division of Corporate Finance’s Disclosure Review Program (DRP).

The new office will do the work currently done across the DRP to look over filings involving cryptocurrencies and will help focus resources and expertise pertaining to crypto, the SEC said Sept. 9.

During the same month, the Justice Department announced that it had created a Digital Asset Coordinator (DAC) Network that features prosecutors who are in charge of its crypto investigations and prosecutions and coordinate these efforts with more than a dozen law enforcement teams.

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

For all PYMNTS crypto coverage, subscribe to the daily Crypto Newsletter .