According to media reports, the United States Department of Justice (DoJ) is preparing to increase its authority over the crypto sector. The DoJ has cited the growing crime rate in the industry over the past four years as the reason behind its recent step.
In a media interaction, Eun Young Choi, director of the national cryptocurrency enforcement team, said that the judicial department would crack down on crypto platforms like exchanges, mixers, and tumblers that enable malicious players to carry out their crimes.
Further, she highlighted that the DOJ’s recent move will prove harmful to those businesses that allow these bad actors to profit from their illegal activities. Choi added:
They’re allowing for all the other criminal actors to easily profit from their crimes and cash out in ways that are obviously problematic to us. And so we hope that by focusing on those types of platforms, we’re going to have a multiplier effect.
It is no new fact that over the past years, malicious players have increasingly used crypto mixers and exchanges to cash out their illegally obtained wealth. Keeping this picture in mind, the U.S. authorities sanctioned mixers like Tornado Cash for their role in laundering illicit funds.
Sources reveal that despite the sanctions, the protocol’s usage continues to remain high. Notably, the malicious players transferred over 1,000 Ethereum and 2,515 BNB into Tornado Cash as of April 30.
Furthermore, Choi revealed that the agency would significantly focus on hacks involving decentralized finance (DeFi), particularly chain-bridge hacks. The director said this was a “significant issue” considering the prevalence of North Korea-backed hackers in these activities.
Chain bridges allow crypto users to move their assets from one blockchain to another. Blockchain analytical firm Chainalysis reported that attacks on these protocols led to the loss of more than $2 billion last year — most attacks were linked to North Korea-sponsored hackers.
Besides the North Korea-linked attacks, DeFi platforms have been victims of numerous exploits. As reported by Todayq News, exploiters stole $93.4 million from 41 exploits on crypto projects in April, averaging more than one exploit daily.
In particular, the US DoJ has always been distasteful towards crypto mixers. In November, Young Choi had described these mixers to be a challenge as the department prepared to efficiently inspect the sector and keep its eye on it.
The DoJ has been very alarmed by the increasing rate of crimes involving cryptocurrencies much like the regulators across the globe. Recently, it seized $112 million worth of digital assets related to crypto investment scams. Kenneth A. Polite Jr., Assistant Attorney General said that authorities will return the seized funds to victims and will attempt to build public awareness. He wrote that these frauds and scams have caused huge devastation to families and taken away their lifelong savings.