In January 2009 a person or persons working under the pseudonym Satoshi Nakamoto unveiled Bitcoin—and the worldwide financial system entered new, uncharted territory.
Bitcoin and its more recent imitators enable individuals to transfer value around the world without the involvement of banks or other traditional financial institutions. Embedded in secure digital ledgers built on blockchain technology, cryptocurrencies are exchanged via digital or physical wallets, which store the ultra-secure passwords called private keys that enable the transfers to take place.
Cryptocurrency transactions are decentralized and pseudonymous, and their records can’t be altered, deleted, or destroyed, making crypto a theoretically secure and trustworthy place to store value. The rapid development of the technology has at times outpaced law enforcement and regulatory efforts to safeguard against illicit use of cryptocurrencies—leaving potential opportunities for the laundering of proceeds from criminal activity using cryptocurrency on a global scale.
Enter University of Miami School of Law alumna Michele Korver.
In July 2021 Korver was appointed the first-ever chief digital currency advisor for the Financial Crimes Enforcement Network (FinCEN). A bureau of the U.S. Department of the Treasury, FinCEN is charged with combatting domestic and international financial crimes, including money laundering, thus safeguarding the integrity of the financial system. It collects and analyzes information about financial transactions, and coordinates sharing of this information with law enforcement, regulators, and other internal and external partners.
The advent of Bitcoin and its ilk added a challenging new dimension to FinCEN’s mandate, to which Korver brought considerable expertise and relevant experience. Prior to joining FinCEN, she was the first digital currency counsel for the Department of Justice’s Criminal Division, advising government attorneys and federal agents on digital currency-related prosecutions, forfeitures, and policy matters.
Before working for the Justice Department, Korver spent a decade as an assistant U.S. attorney in Denver, investigating and prosecuting money laundering and so-called “dark web” drug trafficking cases. It was here that she first saw cryptocurrency being used for criminal purposes.
“Each of us has our ‘genesis story,’” Korver said, recalling her first encounter with Bitcoin. “At the time, [our team] was working on complex multi-jurisdictional drug cases involving cartels. Some investigators encountered drug traffickers on the dark web running distribution-level purchases of contraband [on websites] where Bitcoin was used.”
As one of the earliest prosecutors in the space, “we had to figure out what [Bitcoin] was, how it worked,” Korver said. “What’s the policy for seizing Bitcoin? How do we present blockchain evidence in court? What’s the safest and most acceptable method for storing these assets while the case is pending?” All these legal and regulatory questions, Korver said, had never been contemplated before by federal law enforcement and regulators. “There was no precedent from a policy or legal perspective—we had to figure it all out.”
In 2011, FinCEN instituted a rule that expanded Bank Secrecy Act (BSA) coverage for money transmission activities which allowed the inclusion of activity involving virtual currency, including businesses that exchange cryptocurrencies. Two years later, FinCEN issued guidance that clarified how the BSA relates to entities and individuals who administer, exchange, or use cryptocurrency and who is required to comply with the BSA’s record keeping and reporting requirements.
Yet even with all the enforcement tools available, criminals find new ways to evolve and flourish using new technologies such as cryptocurrency. Korver’s central focus at FinCEN is to coordinate efforts to minimize financial wrongdoing, just as FinCEN’s overarching mission is nothing less than ensuring the safety of the American financial system.
Although Korver’s role is primarily fighting financial crime, she also points to the positives of cryptocurrency. “It has the potential to expand financial opportunity, especially in places where there are significant deficiencies in local banking systems,” she said. “Cryptocurrency can help bank the unbanked; people can transact it on a mobile phone; women can have crypto wallets where they may not be allowed access to traditional financial vehicles. I’m excited about the ways that this innovation can efficiently address these [kinds of] needs.”
Korver credits Miami Law, particularly the litigation skills program, for helping her hone her skills as a prosecutor. “Having that program, where you have realistic factual scenarios, going through mock trials with mentoring by real prosecutors and judges, getting that hands-on experience was, for me, the best, most helpful part of law school,” she said.
She also appreciated the diversity among her Miami Law classmates. “Hearing different opinions and perspectives is very important in law school and having a diverse student body really lends itself to that.”
As a lifelong public servant, Korver has had “many masters, but I never forget that in the decisions I make, I have an ultimate duty to the taxpayers.” When asked what she would be doing in an alternate life, she said she would “either be working in the nonprofit space or doing something artistic. Either interior design or performance—I’d let my artistic side flow."
