The US Department of Justice (DOJ) is looking to increase its scrutiny into the cryptocurrency space, citing the increased crime rate in the industry over the past four years. The FT announced on May 15 that the US Department of Justice (DOJ) crypto team (NCET) will intensify the crackdown against bad actors in the crypto market. Eun Young Choi, who has been appointed director of the cryptocurrency enforcement team, said the DoJ is targeting crypto exchanges, crypto “mixers” and DeFi platforms that have committed or allowed crimes such as enabling money laundering. Here are the details…
War on some cryptocurrency platforms from the USA
Eun Young Choi, DOJ’s NCET Director, explained that the US DOJ is targeting crypto exchanges, companies, and mixers who commit crimes that affect the crypto market, including allowing money laundering. It promises to put pressure on bad actors in the crypto market as the scale of crypto crimes has increased significantly over the past few years. In a May 15 report by the Financial Times, Eun Young Choi, director of the national cryptocurrency enforcement team, said that the DOJ will crash crypto platforms such as exchanges, mixers that allow malicious actors to commit their crimes.
The regulator stated that this would be a deterrent for other businesses that allow these bad actors to profit from their illegal activities. Choi said:
They allow all other criminal actors to easily profit from their crimes and make money in ways that are clearly problematic for us. Therefore, we hope to create a multiplier effect by focusing on such platforms.
DeFi hackers will also face DoJ
In the past years, malicious actors have increasingly used crypto mixers and exchanges to cash out their ill-gotten gains. This has forced US authorities to sanction mixers like Tornado Cash for their role in laundering illegal funds. As we have also reported as Kriptokoin.com, despite the sanctions, malicious actors do not stop. On April 30, hackers or criminals transferred more than 1,000 ETH and 2,515 BNB to Tornado Cash. That is, the use of the protocol remains high.
Choi also stated that the agency will focus on decentralized finance (DeFi) related hacks, specifically bridge hacks. The director said this is a “significant problem” given the prevalence of North Korean-backed hackers in this area. Chain bridges allow crypto users to move their assets from one blockchain to another. Chainalysis reports that attacks on these protocols caused more than $2 billion in losses last year, and most of the attacks were linked to North Korean-backed hackers.
Alongside the North Korea-related attacks, DeFi platforms have also fallen victim to numerous exploits. In this regard, reports have reported that hackers stole $93.4 million from 41 attacks on crypto projects in April.
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