DOJ’s Crypto Crack Team to Target DeFi, Bridge Chain Exploiters, Says Its Top Cop

The United States Department of Justice (DOJ) plans to direct crackdowns against rogue crypto trading platforms and such investment scams, a top official said.

Recently, an FBI report revealed that American citizens lost $2.5 billion to crypto scams in 2022.

DОJ to Target Rogue Exchanges  

Eun Young Choi, director of the National Cryptocurrency Enforcement Team (NCET), said her department will go after entities that either help criminals process their illicit money or turn a blind eye to such activities. 

“… they’re allowing … 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,” she told Financial Times.

Choi also asserted that her team would target crypto investment scams, particularly what is “pig butchering” – a term that refers to scammers developing a relationship over a period before striking their victims.

NCET was formed by DOJ in October 2021, Choi was appointed its inaugural director in February 2022. She has over a decade of experience with the DOJ. 

Defi, Bridge Chain New Focus Areas

Choi also clarified that her focus is on hackers and exploiters of Defi and bridge chain protocols, as state-sponsored North Korean bad actors are the “key actors in this space.” North Korean hackers are believed to have stolen funds worth $630 million to $1 billion in 2022. As per reports, the country leads the world in crypto crime.  

A Forbes report said crypto projects suffered over 125 hacking incidents in 2022. The top five were all in the Defi space, which lost $1.48 billion out of nearly $3 billion that the entire crypto sector lost in these heists.  

NCET’s top cop’s latest assertion marks a departure from the area of focus mentioned earlier. At her appointment, the DOJ said the team would specifically target exchanges and mixers. Instead, the focus now seems to be shifting to security breaches and stealing of funds from Defi and bridge chain projects.

As per an FBI report, American citizens lost $10 billion in online fraud in 2022. Out of this, crypto investment scams accounted for a whopping $2.57 billion.