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DOJ Intensifies Efforts to Combat Investment Fraud
In a bid to combat illicit activities in the cryptocurrency space, the U.S. Department of Justice (DOJ) Crypto Enforcement Director has announced the agency's intention to crack down on crypto exchanges that facilitate criminal behavior, according to a Monday report by the Financial Times.
The National Cryptocurrency Enforcement Team's (NCET) director, Eun Young Choi, revealed the DOJ's plans to target exchanges that enable "criminal actors to profit from their crimes easily." According to Choi, crypto crime has experienced a significant surge over the past four years, prompting the department to take decisive action.
A major focus of the crackdown will be on businesses evading anti-money laundering and know-your-customer regulations or failing to mitigate risk.
Along with cracking down on exchanges, the NCET plans to increase enforcement against investment scams. The agency recovered approximately $112 million last month by halting six such scams.
In addition, the Justice Department intends to target crimes related to decentralized finance, including vulnerabilities in chain bridges and nascent projects.
DOJ's recent charges against Vietnamese national Minh Quoc Nguyen for money laundering and identity theft related to the cryptocurrency platform ChipMixer demonstrate the department's commitment to enforcing financial regulations.
In 2022, the FBI estimated that investment fraud hit $3.31 billion, of which over $2.5 billion was related to crypto-related scams. As the DOJ ramps up efforts to combat crypto-related crime, the industry can expect increased scrutiny and a stronger emphasis on regulatory compliance and risk mitigation.