Will Congress agree to double jail sentences for unlicensed money transfers?

Good news: The Justice Department is finally recommending stiffer penalties for cyber-criminals that target companies’ coffers.

The Justice report to Congress, “The Role of Law Enforcement in Detecting, Investigating, and Prosecuting Criminal Activity Related to Digital Assets,” recommends doubling the maximum prison sentence for unlicensed money transmitting from five years to 10 years.

If approved by Congress, this move would apply to all kinds of financial transfers, not just digital currency such as Bitcoin and Doge.

Many financial pros would agree that compared with other financial crimes – such as fraud (20 years) and money laundering (10 years) – the five-year ceiling for hackers stealing money from businesses isn’t enough of a deterrent.

Many of the resulting criminal cases for illicit money wiring would result in sentences of longer than five years, due in part to the financial harm caused to businesses, according to Justice. In many cases, businesses don’t discover they’re missing money for days to weeks after a crime’s been committed.

Higher fines on the table

Justice is also calling for higher fines for unlawful transfers. Currently the penalties max out at $250,000 for individuals and $500,000 for businesses, while “other money laundering statutes, by contrast, provide for individual fines of $500,000 or twice the value of the funds involved in the transactions or transfer, whichever is greater.” 

Earlier this year, President Biden issued an executive order to improve enforcement in detecting, investigating and prosecuting criminal activity related to digital assets, which may be “used for illicit finance or other criminal purposes – such as money laundering, cybercrime, ransomware, narcotics, theft and fraud, and human trafficking – or to undermine national security by enabling terrorism and proliferation financing.”

Among the other recommended changes to federal statutes, Justice asks Congress to increase the statute of limitations on investigations involving cryptocurrencies and other digital assets, and “strengthening the
laws criminalizing the operation of unlicensed money transmitting businesses.”

Congress is unlikely to move on any of these recommendations before the midterm election. There is fairly strong support on both sides of the aisle to rein in crypto companies.