The U.S. cryptocurrency enforcement tsar highlighted that the country is stepping up scrutiny of crypto exchanges to target illicit behavior on the platforms, the Financial Times reported. Eun Young Choi, director of the justice department’s national cryptocurrency enforcement team (NCET), recently spoke at the Financial Times Crypto and Digital Assets Summit and confirmed that the DOJ is after crypto firms that either commit the crime or turn a blind eye to “obscure the trail of transactions”.
She mentioned that “The DOJ is targeting companies that commit crimes themselves or allow them to happen, such as enabling money laundering.” In the Financial Times report published on May 15, Choi highlighted that the department is focusing on thefts and hacks involving DeFi, and “particularly chain bridges.”
This increased stringency regarding regulations and crackdown was retaliation for “state-sponsored hacking” by North Korea. According to independent sanctions, monitors said in its report to the UN Security Council Committee, it highlighted that North Korea used increasingly sophisticated cyber techniques both to gain access to digital networks involved in cyber finance and to steal information of potential value, including to its weapons programmes.
The UN report also noted that cyber attacks were more sophisticated than in previous years, making tracing stolen funds more difficult than ever. It found North Korean-linked hackers were responsible for between $630 million and more than $1 billion in stolen crypto assets last year after targeting networks of foreign aerospace and defence companies.
She further added that the Department is targeting companies that commit crimes themselves or allow them to happen, such as allowing money laundering. She also coined the idea of the multiplier effect where she explained the benefits of going after the source that is the platform as it will make it difficult for criminal actors to easily make profits from the crimes committed. Choi further emphasized the scale and the scope of digital assets being used in a variety of illicit ways has grown significantly over the last four years.
The NCET was established to ensure the Department of Justice meets the challenge posed by the criminal misuse of cryptocurrencies and digital assets and comprises attorneys from across the department, including prosecutors with backgrounds in cryptocurrency, cybercrime, money laundering and forfeiture. The NCET is aimed to identify, investigate, support and pursue the department’s cases involving the criminal use of digital assets, with a particular focus on virtual currency exchanges, mixing and tumbling services, infrastructure providers, and other entities that are enabling the misuse of cryptocurrency and related technologies to commit or facilitate criminal activity.
