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DOJ Targets DeFi Illicit Activities and North Korean Hackers in Crypto Crackdown
The US Department of Justice (DOJ) is intensifying its efforts to combat illicit activities in the realm of decentralized finance (DeFi) as part of its crypto enforcement strategy. Eun Young Choi, director of the DOJ's national cryptocurrency enforcement team (NCET), highlighted the significance of the issue, particularly in light of the involvement of North Korean state-sponsored hackers.
According to Choi, North Korean hackers were responsible for stealing between $630 million and over $1 billion in crypto assets in 2022. The rise of such state-sponsored hackers has prompted the DOJ to focus on thefts and hacks related to DeFi, with specific attention on chain bridges. Choi explained that the DOJ aims to target companies that engage in criminal activities themselves or enable them, including those that facilitate money laundering.
DeFi Platforms Under Scrutiny: DOJ's NCET Aims to Curb Illicit Activities
The NCET, established in February 2022, serves as a central entity for the DOJ to address cryptocurrency-related cybercrime, money laundering, and forfeiture. Although the DOJ initially emphasized its focus on "mixing and tumbling services," DeFi platforms have now become a particular area of concern.
Choi emphasized the growing scale and scope of digital assets being exploited for illicit purposes over the past four years. Notable examples include the Euler Finance hack in March 2023, where approximately $196 million worth of various cryptocurrencies were stolen, and the Mango Markets exploit in November 2022, which resulted in the draining of funds and the elimination of liquidity from the platform.
The DOJ's crackdown on DeFi hackers and exploiters is part of its broader objective to disrupt criminal actors and prevent them from profiting easily. By targeting the source, the platforms themselves, the DOJ aims to create a multiplier effect that hampers criminal activities and their financial gains.
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