Crypto Crime On The Rise, DOJ Takes Aim At Violators Including 'Too Big To Fail'

Amid a significant increase in crypto-related crime over the past four years, Eun Young Choi, the newly appointed head of the Department of Justice's (DOJ) cryptocurrency enforcement division, has pledged to fortify the crackdown on illicit activities in the digital asset sector.

This enforcement effort will particularly target cryptocurrency exchanges and services like "mixers and tumblers" that obfuscate transaction history.

Choi expressed the DOJ's commitment to holding accountable firms that perpetrate crimes or facilitate them, like aiding money laundering, the Financial Times reported.

"What we're seeing is an ease in profiting from and liquidating criminal gains that is, clearly, of concern to us," Choi said.

"Our hope is that by concentrating on these types of platforms, we can achieve a ripple effect."

She emphasized that the intensified oversight would serve as a stark warning to businesses that fail to adhere to anti-money laundering or customer identification regulations or neglect to institute robust compliance and risk management strategies.

This initiative comes at a time when the United States, under President Joe Biden's administration, has adopted one of the most stringent global stances on cryptocurrency.

Also Read: EXCLUSIVE: Crypto Regulators, Are You Listening? Bitget's Managing Director Gracy Chen Has Some Advice For You

Choi explained, "We have witnessed a significant surge in the illicit use of digital assets in the past four years, parallel to the broader public acceptance of these assets."

These declarations come in the aftermath of a major blow to the cryptocurrency industry with the downfall of FTX, a previously reputed exchange.

FTX's founder, Sam Bankman-Fried, is facing charges that include wire fraud and conspiracy to commit money laundering, and violation of campaign finance laws, all of which he denies.

U.S. authorities have also aimed at Binance, the world's leading cryptocurrency exchange.

In March, the U.S. derivatives regulator accused the company and its CEO, Changpeng Zhao, of unauthorized operations within the U.S. Binance claims that it has no official headquarters and does not serve American customers.

Industry insiders worry that further regulatory pressure on pivotal companies like Binance could destabilize the wider industry.

However, Choi stated that a company's size won't influence the DOJ's consideration of potential charges.

Choi argued that if a company "gained a substantial market share partly by disregarding U.S. criminal law", the DOJ can't "afford to overlook violations just because a company claims to be 'too big to fail.'"

She stressed, "Consider the implications of such a move. This cannot be our approach when dealing with cryptocurrency, or any white-collar crime for that matter."

She further said the DOJ is honing in on thefts and hacks in the decentralized finance (DeFi) sector, particularly "chain bridges," and budding projects susceptible to such attacks.

Read Next: Binance Breaks Up With Canada: Crypto Giant Abandons the North American Country

Photo: Shutterstock