The United States Department of Justice (DOJ) is set to crack down on rogue crypto trading platforms and investment scams, according to a top official.
An FBI report revealed that American citizens lost $2.5 billion to crypto scams in 2022.
DOJ Targets Rogue Exchanges
Eun Young Choi, director of the National Cryptocurrency Enforcement Team (NCET), announced that her department will target entities that assist criminals in processing illicit funds 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 plans to target crypto investment scams, particularly the “pig butchering” tactic used by scammers to build trust with victims before taking their money.
NCET was created by the DOJ in October 2021, with Choi appointed as its first director in February 2022. She has over a decade of experience with the DOJ.
DeFi, Bridge Chain Focus Areas
Choi also clarified that her focus is on hackers and exploiters of DeFi and bridge chain protocols, as North Korean state-sponsored 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, with the country leading the world in crypto crime.
A Forbes report stated that there were over 125 hacking incidents in crypto projects in 2022. The top five happened in the DeFi sector, which lost $1.48 billion out of nearly $3 billion in total crypto sector losses due to these heists.
NCET’s focus is shifting from exchanges and mixers to security breaches and fund thefts from DeFi and bridge chain projects.
According to an FBI report, American citizens lost $10 billion in online fraud in 2022, with crypto investment scams accounting for $2.57 billion of that amount.