As cryptocurrency use surges in the United States, the number of federal investigators focused on safeguarding against illicit financial activity within the industry has fallen to its lowest level since 2017. Federal data obtained by the International Consortium of Investigative Journalists (ICIJ) revealed the decline in investigators assigned to review safeguards against dirty money in the crypto industry last year.
The cuts weaken the anti-money laundering watchdog’s office within the U.S. Internal Revenue Service (IRS), which oversees protections against dirty money in crypto exchanges and other firms registered as money service businesses. Experts say the IRS already struggled to oversee the fast-growing crypto sector, and the reductions come as oversight of crypto exchanges—which move trillions of dollars annually—has eased.
“The reduction in supervisory staff at the IRS matches a trend we’ve seen across [anti-money laundering] enforcement agencies,” said Erica Hanichak, deputy director at the FACT Coalition. “This sends the signal that the US is open to dirty money. It undermines our national security and market integrity.”
The IRS did not respond to requests for comment. The situation comes after last November’s publication of “The Coin Laundry,” an ICIJ investigation into dirty money in the cryptocurrency industry. The investigation revealed that, as recently as July 2025, Huione Group, a Cambodian financial institution flagged as a “primary money laundering concern,” sent large sums of cryptocurrency to accounts at major exchanges like Binance and OKX—even after authorities identified problems with their anti-money laundering protocols.
Crypto Exchanges as Financial Pathways
Cryptocurrency exchanges allow users to buy, trade, and deposit cryptocurrency, and also provide a way to convert crypto assets into standard currency. This conversion capability is attractive to those seeking to launder money.
U.S. Regulators classify crypto exchanges as money services businesses, like Western Union. Even before the recent cuts, the IRS office responsible for overseeing these businesses struggled with adequate supervision of cryptocurrency operations, according to the agency’s inspector general.
In 2021, then-IRS commissioner Charles Rettig told Congress the agency needed more staff to address the “rapidly evolving and expanding” cryptocurrency industry. However, in 2025, the number of IRS investigators overseeing dirty money defenses at crypto firms and other money transmitters fell 33 percent to 139 agents—down from 208 in 2024. This is the lowest number in the available data, which dates back to 2017.
Christina Rea, a compliance specialist advising crypto firms on IRS examinations, says the agency is struggling to keep pace with the booming and complex crypto sector. Alison Jimenez, an anti-money laundering expert, described cryptocurrency oversight as “a very loosely knitted-together safety net” that is now “just getting pulled farther apart.”
Frequently Asked Questions
What is “The Coin Laundry”?
“The Coin Laundry” is an investigation published last November by the International Consortium of Investigative Journalists, in collaboration with 37 media partners in 35 countries, into dirty money in the cryptocurrency industry.
How have the number of IRS investigators changed recently?
The number of IRS investigators assigned to oversee anti-money laundering practices in cryptocurrency firms and other money transmitters fell 33 percent in 2025, to 139 agents, down from 208 in 2024. This is the lowest number since at least 2017.
What did the Justice Department say about investigating crypto-related crimes?
In April, the Justice Department said it would still “pursue the illicit financing of these enterprises by the individuals and enterprises themselves, including when it involves digital assets, but will not pursue actions against the platforms that these enterprises utilize to conduct their illegal activities.”
Given the declining number of investigators and the increasing complexity of the cryptocurrency landscape, what steps might be taken to address potential risks to financial security and market integrity?
