Public service, along with these other Television Providers giving you a front row seat to democracy. Officials from the justice and Treasury Department talked about financial crimes at the aspen security forum, including Money Laundering, the dark web and cryptocurrency. This is 35 minutes. If im not mistaken, i can stay with confidence this is surely the most sibilant panel of the security forum, sanctions, scams and schemes. We have representatives of the private sector. Were here with aaron from paypal, brian from treasury and matt from the Justice Department. We will get to Money Laundering, cybercrime, cryptocurrency, how ai is changing the game or not, what gives you hope, what gives you nightmares . Lay on me your best to 62nd swing at this each of you. How does your work look difference then when we were on this stage five years ago. Cast your mind back to 2018. I want to start there because they want to give people a taste of how quickly things are moving. We will start with aaron. 6 billion transactions. That is a huge Playing Field for us. Very interesting Playing Field for us commercially, but also my role to protect those customers and transactions. The other accelerating trends are on the bad actors side. They are getting more sophisticated and attacking more at scale than ever. Covid and covid relief is a great example of the last five years. Weve already scams are estimated between 200 and 200 billion. Not from paypal, just overall. Part to combat that. We want to stop the bad actors. We also want to enable our customers. We had to quickly give it to deal with that sophistication while ensuring the good customers that needed that belief could get it. Brian, the view from treasury. You see the explosion of in terms of payment opportunities to move value across the globe has exploded. Mobile money, mobile payment systems. That obviously creates opportunity for cyber enabled crime. We have seen an explosion of ransomware, extortion, particularly in the United States but globally we have seen the proliferation of these dark debt markets where drugs and your id, your credential and private information is sold again to facilitate ongoing finance criminal activities. I think we recognize this actor could be anywhere in the world. The one thing i have seen our government do and continue to do well is push for International Solutions to these challenges. Thank you. Great to be here. If i could expand that question to 10 years ago. I sat on the stage. We talked about the rise of isis and attacks in the United States. At the department of justice, we still care about terrorism and recently, domestic terrorism. Now the focus is on the intersection between National Security and financial crime. I think about export enforcement. Keeping Sensitive Technology in the United States from getting to our adversaries. We go after oligarchs and pursue sanctions invasion. The cybercrime you talk about. Our work has really shifted significantly. Just in light of the threats we face and what were looking at in terms of nationstate adversaries. Also, how much that work is not just the federal government terrorism. When we talk about financial crime, it is partnerships with the private sector. They are on the front lines of this fight. I want to make this specific. It is so big and abstract. You mentioned dark debt markets. It is still a little bit of a case study. There were headlines last year. A Justice Department investigation led to the shutdown of this market. You said this was the Worlds Largest running darknet market. Help me understand what that means. What was it . What was happening on this platform . I am happy to. In addition to partnering with justice, we designated this at the time. The things you see on these dark debt markets is a lot of Drug Trafficking. You are worried about Drug Trafficking organizations. Synthetic opioids on these markets really feeling what we have seen in terms of the growth and ventilated debts here in the United States. That is a Critical National secured concern. You see the selling of these credentials so your Social Security number can be sold on these markets. Your house, your home information so they can create a synthetic version of you, apply for your credit or otherwise, try to profit off your information. Who is selling who is telling . It could be anyone. These darker markets are being relied upon by cyber criminals in russia. That is a common jurisdiction we see but truly, these actors are acting everywhere in the world. There is a part where brian and his team have the sanctions. With hydro, we work closely together, we actually charged the individual response of overrunning for running the darknet website. From a security perspective, ransomware and the movement of funds. There is a range of different types of activity. They are the fuel for Illicit Activity and we have to bring all of our tools there across the government to go after them. I was fascinated. This was a doj takedown. The servers of the cryptocurrency while it, that was germany. Why does that matter . Talk about that partnership and why it matters. Where the servers are matters a lot. To be able to actually take down the website, the conversation is always what is the disruptive effect . We have tools and then the foreign partner will also have a tool that could lead to some disruptive thing that we dont want to do. We could take an action that will not disrupt the criminal activity at work. This was critical to get the service taken down. You said you charged the main guy. Now that they know how to do this, are you already see copycats . I think this is a challenge we all face. These nefarious actors take advantage of the boundaryless nature of dark markets, ransomware, cybercrime generally. We are living in a physical world in terms of Law Enforcement where we want to arrest the person responsible and put them in a courtroom in the United States and then a in the United States. Sometimes that can be evasive. Highlighting the kinds of things we are seeing through our charging documents so we can put them on notice but also put other actors that is not always possible so we look for other ways to carry out disruptions and sometimes that can be as basic as announcing and highlighting the kinds of things we are seeing through our indictments and charging documents that we can put them on notice and other actors and achieve some general deterrence because we can say we are watching you and will go after you. Yeah. Please. That is definitely true that you take one down and often times you see them deliver late in another jurisdiction. It is called hydra. [laughter] hydra was so big i think we have not seen a dark net market of scale anywhere near that size the time we took it down. Lets go to ai, a threat running through so many conversations this year. This was on the radar five years ago but nothing like it is now. To make it specific, i know you all have talked about how ai is enabling fraud as a business model. Explain. Sure. One, ai is a big topic that has been around for a while. You have machine learning, ai, and now generative ai, the next big step. Thats why were talking about it, because it is a game changer for everyone, and one of the ways to think about it is because it enables the machine to make the next decision, it lowers the barrier of entry for everyone. So whether you are starting a business to do photoshop to make pictures, well, now you dont need the training you might have needed, but on the bad guys side, which is a trend we have seen over the years you do an amazing job of taking them down but you see bad guys using their capabilities, but rather they built the tools on cell them right . With generative ai they can do that at scale and actually create apidriven products with product releases and you can have fairly low level people on the bad actors side participating in very sophisticated attacks. Give us an example so we can another hot topic is ransomware. The bad actors go after peopless emails and try to convince them. Well, with generative ai those would look more real than ever and you can operate that faster and with more frequency than ever, and by the way, you dont need to know how to do it. You can buy it for someone else in the dark web and deployed against the company, so it will be harder to detect rio from the fake, so no doubt real from the fake, so no doubt deterred by us and others, it would turn into much worse cases if not. How is the private sector generally thinking about using it in good ways . How does it help . Ai has been part of our dna for a long time. Part of the lifeblood for companies you want to enable these transactions and were not taken advantage of and lose too much money, so we have been investing on the cutting edge of these technologies, including Large Language Models for many years, actually, so that continues to be on the leading edge for us that we will continue to invest their to protect our platforming customers because if we dont, we know that the bad guys will continue to expand the capabilities, and so if youre not staying one step ahead, you are behind. To what extent are you able to act it please it police . With the Disruptive Technology strike, what is that . When we think about Artificial Intelligence from a National Security standpoint, doj standpoint, we think about how products these technologies. These are Game Changing technologies that companies and the government are developing that allow us to stay a step ahead of our adversaries, whether military, intelligence, or general technology, so we have laws that protects sensitive technologies, ai first among them, from being transferred illegally to our adversaries, so we set out this year, a new strike to enforce export controls and to make sure that together as a team we are preventing these sorts of sensitive technologies from illegally being moved outside the United States because these are the technologies that literally have the capacity to alter the balance of power between the United States and our adversaries. How well is it working . Right now, pretty well. We just started. We announced five cases a couple of months ago. One involved a Software Engineer who worked at apple who took, stole some of apple Ai Technology and went to work immediately for a company in china, and he has been charged now by an indictment for a budget that engaging in stealing apples proprietary technology, so we are working again very closely with the private sector who are at the forefront of developing these technologies to make sure we are in a position to protect them. Do you want to jump in on this one . We are focused on the one of our roles at treasury is to protect Critical Infrastructure and focus on Financial Institutions, so recognizing that technology will create opportunity, obviously as matt noted both on the National Security side as well as opportunity for adversaries and bad actors out there. We are focused on resilience, not just in the context of ai, but quantum and other Disruptive Technologies as map noted him and in working with private sector partners frankly to understand how bad actors are using these tools and what they are seeing. Staying with new technology and things we might not have been talking about on the stage five or 10 years ago, cryptocurrency. Um, i have a bunch of big general questions but i have been struck by recent headlines of Major Players in that field going belly up. How does that impact your work from a purely just trying to stop financial crimes point of view setting aside convenience, profitability, Everything Else . Is this a Good Development . I dont know if it is good or bad. I think we come from a couple of perspectives, bases we want to support, responsible innovation in the way we see that happening is for cryptocurrency firms, Virtual Asset Service providers, to build in meaningful Money Laundering and terrorist financing compliance in the service, in the app, or on their block chain, so that is critical from our perspective, number one. Number two, i think what we have seen, we have done some illicit finance risk assessments in the context of Digital Assets and specifically decentralize finance, and in both cases what you see is there are a lot of these Virtual Asset Service providers subject to compliance and sanctions, screening rules, and they are not following those, and that is frankly the biggest sorts of source of risk, because bad actors no that if these companies are not doing screening or having that compliance that they can run whatever form illicit finance they want through that service, of getting complaints is sort of the first step for us and then obviously avoiding the scenario where you have these Companies Jumping from jurisdiction to jurisdiction to avoid meaningful compliance are working globally through the Financial Action task force which sets compliance across the world is a key part of that set that we are trying to attach. Sure. Also, obviously for responsible innovation, and you know, embracing new technology and understanding it and being responsible player in it. For cryptocurrency, there are many facets to it, but at the end of the day, whatever the new technology there is concern its moving money from point a to point b, what do you know about. 8, and in between . Richter currency is interesting because as you should sometimes point a you dont know that much but you know where it ends up and heres the interesting part, cryptocurrency runs on the block chain which is technology that actually has an immutable ledger, once something happens there emmett it is there forever there, it is there forever. That is important to help Law Enforcement so there are tools that are actually enabling the government and the private sector to crack really Extensive Global syndicates who are using cryptocurrency. So i think there was a weight the bad actors felt the that this was really going to protect them in a way that they are seeing that those funds are being grabbed, sometimes they are being grabbed, so some demystification is helpful and there are responsible ways to participate in what will no doubt be part of commerce. Yeah, just to comment on that because i totally agree with your comments. We at the Justice Department work closely with companies responsible companies with good compliance programs committed to good Corporate Governance and working with the government, it is the case that crypto by its nature, by its decentralized, pseudoanonymous, there are not intermediaries, that is why, those features of crypto help it to become the fuel for ransomware. From a National Security perspective, the biggest concern is how north korea uses crypto by basically stealing it. They steal it to support their Weapons Program, you can see immediately why that is a big concern for us. I think public reports that is they have stolen three b in crypto since 2016 and we work with response were actors and the Treasury Department and elsewhere to seize and freeze some of this crypto so it can never be actually used, someone just sits on the block chain, not available to the dprk to build muscles. Other specific challenges going after activity happening or linked to north korea . Well, i mean anything linked to north korea will be hard, but it is a newer problem for us and were thinking about how we can be innovative really being able to trace to your exact point, we have some capacity to trace these funds that we can take steps to prevent it from ultimately making its way into the supporting Weapons Program in the dprk. Speaking of specific countries, one of you mentioned a lot of the bad guys are trying to go after art in russia or linked to russia, have you seen any impact from the war in ukraine, have you seen any impact from russia decoupling from the Global Economy in many ways, getting kicked out of swift, etc. , as that impacted illicit financial activity that is russialink you are seeing . It has. So, at the beginning of the conflict, there was a lot of concern that russia would try to use these other financial realms to evade our sanctions and i dont think we have seen that sort of at scale yet, you know, the capacity to move billions and billions of dollars and then cash that out meaningfully. We are still not seeing that, and an economy the size of russia is not able to do that, but we have seen the development and interest in developing new payment relationships, Financial Relationships with countries in russias near abroad, and one of the things that me and my colleagues have been doing around talk