September 30, 2023

The US Department of Justice (DOJ) is looking to increase its investigation of the crypto space, citing rising crime rates in the industry over the past four years.

US DOJ targets crypto exchanges, others

In a May 15 Financial Times report, Yoon Young Choi, director of the National Cryptocurrency Enforcement Team, said the DOJ would crack down on crypto platforms such as exchanges, mixers and Tumblr that enable malicious players to perpetrate their crimes.

The regulatory chief said that this will act as a deterrent to other businesses that allow these bad actors to profit from their illegal activities.

Choi said:

“They are allowing all the other criminal actors to easily profit from their crimes and cash out in ways that are obviously problematic for us. And so we hope that by focusing on those types of platforms , we’re going to have a multiplier effect.

In the past years, malicious players have increasingly used crypto mixers and exchanges to cash in their illicit funds. This forced US authorities to sanction mixers like Tornado Cash for their role in laundering illegal money.

Despite the ban, usage of the protocol remains high as malicious players moved over 1,000 ETH and 2,515 BNB to Tornado Cash as of April 30.

DeFi exploiters to face DOJ

Choi further said that the agency will also focus on hacks related to decentralized finance (DeFi) – specifically Chain-Bridge hacks.

director Said This was an “important issue” given the prevalence of North Korean-backed hackers in these activities.

Chain bridges allow crypto users to transfer their assets from one blockchain to another. Blockchain analytical firm Chainalysis reported that attacks on these protocols caused more than $2 billion in losses last year — most of the attacks were linked to North Korean-sponsored hackers.

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In addition to attacks linked to North Korea, DeFi platforms have been victims of several exploits. for reference, cryptoslate The report states that exploiters stole $93.4 million from 41 exploits on crypto projects in April – an average of more than one exploit per day.