The US Department of Justice (DOJ) is stepping up efforts to combat illegal cryptocurrency activities by targeting hackers and exploiters of decentralized finance (DeFi) platforms.
In response to a surge in such activities over the past four years, the department announced the establishment of the National Cryptocurrency Enforcement Team (NCET), and appointed by Eun Young Choi to lead the team.
During her recent appearance at the Financial Times Crypto and Digital Assets Summit, Choi emphasized the DOJ’s focus on cryptocurrency firms that engage in criminal activities or turn a blind eye to transaction obfuscation. Specifically, the department is targeting thefts and breaches in the DeFi space, with a particular emphasis on chain bridges. Choi noted that by directly attacking the platforms, the DOJ aims to prevent criminal actors from profiting and create a deterrent effect.
Choi also highlighted the involvement of North Korean state-sponsored hackers in this domain. They are estimated to have stolen crypto assets worth between $630 million to over $1 billion in 2022, underscoring the importance of addressing these issues for the DOJ.
Choi was appointed as the inaugural director of the NCET in February 2022. She brings nearly a decade of experience as a prosecutor in the DOJ to her role.
DeFi platforms have recently experienced a series of high-profile attacks. Euler Finance, for instance, suffered the largest DeFi hack this year so far, resulting in the theft of approximately $196 million in various cryptocurrencies. Another platform, Mango Markets, faced an exploit that drained its funds due to low liquidity. The hacker invested $5 million to manipulate the price of MNGO tokens and obtain a loan of $116 million, completely depleting Mango Markets’ liquidity.
While the DOJ initially did not explicitly mention DeFi platforms as targets when announcing the NCET, it did indicate a focus on “mixing and tumbling services.” The inclusion of DeFi platforms reflects the growing recognition of their vulnerability to criminal exploitation.
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