The US Department of Justice (DOJ) is looking to increase its oversight of the crypto space, citing growing crime in the industry over the past four years.
US DOJ focuses on crypto exchanges, others
In a May 15 Financial Times report, the director of the national cryptocurrency enforcement team, Eun Young Choi, said the DOJ would crack down on crypto platforms such as exchanges, mixers and tumblers that enable malicious players to commit their crimes.
The regulatory chief noted that this would act as a deterrent to other companies allowing these bad actors to profit from their illegal activities.
choi said:
“They easily let all other criminal actors profit from their crimes and make money in ways that are clearly problematic to us. And so we hope that by focusing on those types of platforms we will have a multiplier effect.”
In recent years, malicious players have increasingly used cryptomixers and exchanges to cash in on their ill-gotten wealth. This forced US authorities to penalize mixers like Tornado Cash for their role in laundering illicit funds.
Despite the sanctions, usage of the protocol remains high as malicious players have transferred more than 1,000 ETH and 2,515 BNB to Tornado Cash as of April 30.
DeFi exploiters face DOJ
Choi further noted that the agency would also target hacks involving decentralized finance (DeFi), particularly chain bridge hacks.
The director said this was a “significant problem” given the prevalence of North Korean-backed hackers in these activities.
Chain bridges allow crypto users to move their assets from one blockchain to another. Blockchain analytics firm Chainalysis reported that attacks against these protocols led to losses of more than $2 billion last year — most of the attacks were linked to North Korea-sponsored hackers.
In addition to the attacks linked to North Korea, DeFi platforms have fallen victim to numerous exploits. For context, CryptoSlate reported that exploiters stole $93.4 million from 41 exploits on crypto projects in April — an average of more than one exploit per day.
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