In brief
- US DEA Special Agent Patrick O’Kain was interviewed at the LA Blockchain Summit.
- He spoke on topics such as the BitMEX charges and compliance of crypto exchanges.
- O’Kain suggested that any sort of US crypto ban could be harmful to law enforcement.
During today’s first day of streaming panels at the LA Blockchain Summit, United States Drug Enforcement Administration (DEA) Special Agent Patrick O’Kain, who helped establish the New York Cyber Unit, discussed how government agencies approach cryptocurrency and indicated that regulated exchanges are good for law enforcement.
The moderator kicked off the conversation about exchanges by noting the high-profile $281 million KuCoin hack and the United States Commodity Futures Trading Commission filing money-laundering and civil charges against BitMEX along with criminal charges against its owners.
“If those allegations turn out to be true and they’re found guilty, I think they’re doing a big disservice to the crypto industry,” said O’Kain about BitMEX, although he noted that his views are personal and not necessarily representative of the DEA or wider US Department of Justice.
O’Kain pointed to Gemini as an example of a US crypto exchange that has closely followed regulations and built its business around compliance. “Companies like that have done leaps and bounds more for crypto adoption,” he said, compared to exchanges that dodge regulations in favor of signing up as many users as possible.
While he only mentioned Gemini by name, O’Kain said that his own personal interactions with US-based crypto exchanges have been largely positive, and that those playing the long game see the benefit of compliance. “The biggest ones that I’ve interacted with, they’ve been really good. They’ve been very cautious, they’ve had an eye towards regulation,” he said, adding that most US exchanges “care about the integrity of the crypto market.”
“In my opinion, nobody really wants criminals using their platforms,” O’Kain added.
US government agencies have been ramping up their crypto- and blockchain-tracing capabilities of late. While there’s no sense that the United States would try to ban or limit the use of cryptocurrency on a wider scale, as has been done in China and Vietnam, O’Kain suggested that the failure of such laws to slow adoption there shows that it would be a difficult venture to undertake.
“There’s a ton of routes that the government could take, but I think it’s important to take the learnings from other countries,” he said. “If you look at it like that, these laws didn’t really make a difference in crypto adoption. I think that it would be very hard to enforce that. I just don’t see it happening; I think it’d be a heavy lift.”
O’Kain added that law enforcement can currently access information from compliant exchanges with probable cause, subpoenas, and search warrants. Shutting down fiat on-ramps and off-ramps to crypto in the US would cause “more harm than good,” he said, as it would limit law enforcement’s insight into illicit transactions.