US Attorney General Eric Holder believes bitcoin criminals pose a new set of challenges for law enforcement. During his testimony this morning before the House Judiciary Committee Holder said the US Justice Department is keeping track of bitcoin-related developments.

Of course, this does not mean that the Justice Department is treating all bitcoin transactions as suspect. Holder stressed that the department is working with financial regulators in an effort to weed out the bad apples.

Holder’s interest in bitcoin is focused solely on “bad apples” and cyber criminals who are taking advantage of bitcoin’s pseudo anonymity.

He said the Justice Department is committed to innovating alongside bitcoin in order to ensure criminal investigations are not impeded by technological advances. This is nothing new in the world of cyber crime. Authorities have been engaged in a technological arms race with cyber criminals for decades.

Holder told the House Committee:

Holder warned that digital currencies wouldn't stay safe havens for cyber criminals, drug traffickers and other bad actors and said that the difficulty of tracking digital currency transactions wouldn't protect them forever.

Said Holder:

While it is encouraging to see the Justice Department pledging to keep up with technological developments and undermine criminal activities that could benefit from cyptocurrency transactions, Holder did not mention other forms of crime associated with bitcoin and other digital currencies.

Such crimes range from attacks aimed at bitcoin exchanges to hacked wallets and mining malware. The temptation of using a pseudonymous payments system is proving too much for many cyber criminals out there.

Bitcoin ransomware

is on the rise, along with malware that targets bitcoin wallets and even elaborate mining botnets. Although the latter are no longer very effective for bitcoin mining they can be used to mine certain altcoins.