IRS Criminal Investigation Chief Joins Chainalysis

Jim Lee, a veteran of the United States government with 29 years of experience, has left his position as the chief of the Internal Revenue Service’s Criminal Investigations team to join cryptocurrency analytics firm Chainalysis. The firm announced on April 8 that Lee will now serve as its global head of capacity building, focusing on helping international agencies combat cryptocurrency-related crimes. During his time at the IRS, Lee collaborated with Chainalysis on occasions to support the seizure of cryptocurrency used for illicit purposes. In December 2023, he highlighted the risk that digital assets pose for financing terrorism and ransomware attacks, while acknowledging their legitimate use as well.

Lee believes that cryptocurrency has brought greater transparency and efficiency to finance and has the potential to give people more control over their money, ultimately enhancing financial inclusion worldwide. He also recognizes that criminals have been quick to adopt this technology. In a LinkedIn post, he expressed his intention to step aside and provide others with the opportunity to lead. Lee attributes his move to Chainalysis to the company’s active role in ensuring the safety of cryptocurrency transactions.

Chainalysis has worked closely with US authorities in various criminal cases involving cryptocurrency, including those related to ransomware attacks during the pandemic and assisting in transaction tracing for tax reporting. Lee’s retirement from the IRS was announced in March, with Guy Ficco appointed as his successor starting on April 1. Despite reaching out to the IRS for comment, did not receive a response.

Lee’s transition to Chainalysis occurs at a time when US lawmakers, such as Senator Elizabeth Warren from Massachusetts, express concerns about government officials who have previously been involved in legislating or enforcing regulations related to cryptocurrency eventually moving into the digital asset industry after leaving their public service positions. Senator Warren has suggested that some officials may use their time in public service to prepare for future roles in the private sector involving cryptocurrencies.