The special agent heading up the Internal Revenue Service’s Criminal Investigation division (IRS-CI) says that crypto companies will need to work closely with federal agencies if they want to build legitimacy.
Speaking to the Wall Street Journal (WSJ), New York-based special agent Thomas Fattorusso also claimed that the only way forward for agencies trying to regulate and fight crime within the space is to work hand-in-hand with those operating in it.
“Cryptocurrency is here to stay,” said Fattorusso (via WSJ).
“We can’t be hostile to the technology. We have to embrace it. It isn’t going anywhere anytime soon and it’s becoming more legitimate as the years roll on.
“My thought is that those relationships will develop as the years go on and as the companies become more comfortable with dealing with the federal government. I don’t see how we can operate in this space without it,” (our emphasis).
According to Fattorusso, the goal is a “symbiotic” relationship between regulators and firms
“It helps them in their legitimacy,” he said. “This is a new industry for everybody. I think we’re still trying to feel our way around it. The companies are feeling their way around it.”
Can the IRS keep its ‘accountants with guns’?
The major question for the IRS is whether or not it can continue to attract the people and resources it will need to keep pace with the burgeoning crypto industry. This problem is exacerbated by the fact that the agency, currently in the midst of a hiring drive, is competing with the cash-rich crypto industry itself for top talent.
However, Fattorusso says that this isn’t necessarily a bad thing.
“We’ve had several of our cyber agents and managers go to private companies,” he told WSJ.
“We are finding those partnerships to be beneficial because they understand what we need from a law-enforcement aspect to investigate cybercrime. And they can help us in that arena. And now we have an open flow or open dialogue we didn’t have before because we didn’t have a contact there.”
Fattorusso referenced the so-called “revolving door” that will often see agents – affectionately dubbed ‘accountants with guns’ – leave for the private sector only to return years later and bring their crypto-side experience with them. This, he says, is particularly useful given the current crypto landscape.
“If you’re familiar with what’s been going on in some of these exchanges, you know that our agents are marketable, and they’re getting picked up in these various private companies because of the work that they do and because of the knowledge that they bring,” he said (our emphasis).
“We’re hoping to develop those relationships even further. ‘OK, you used to work here with us, maybe you can help us with investigations.’”