US Justice Department On The Hunt For DeFi Hackers And Thieves: Report

Amid a four-year surge in illegal crypto activity, the United States Department of Justice’s crypto enforcement team is cracking down on decentralized finance (DeFi) hackers and exploiters.

in the Financial Times reports Published on May 15, Yoon Young Choi, director of the National Cryptocurrency Enforcement Team (NCET) of the US Department of Justice (DOJ), said that the department is focusing on thefts and hacks involving DeFi and “specifically Chain Bridge”.

Choi said it was a “quite important issue” for the DOJ because North Korean “state-sponsored hackers” have emerged as a “major actor” in this area.

Cointelegraph reported in February that North Korean hackers stole an estimated range of $630 million to more than $1 billion in crypto assets in 2022.

The DOJ announced Choi – a prosecutor with nearly a decade of experience at the DOJ – as the first director of the NCET. february 2022.

At the time, a statement from the department explained that the NCET would serve as a “focal point” for the DoJ in its handling of cryptocurrency, cybercrime, money laundering and extortion.

While the DOJ highlighted that “mixing and tumbling services” would be a particular focus for the agency, it did not mention anything specifically regarding DeFi platforms at the time.

Choi, who recently spoke at the Financial Times Crypto and Digital Assets Summit, confirmed that the DOJ is after crypto firms that either commit crimes or turn a blind eye to “obscuring the trail of transactions”. Let’s take He noted:

“The DoJ is targeting companies that commit or allow crimes themselves, such as enabling money laundering.”

He explained that going after the source, the platform itself, would have a “multiplier effect” in terms of preventing criminals from “easily profiting from their crimes”.

Choi further stressed that “the scale and scope of digital assets being used in a variety of illegal ways” has grown significantly over the past four years.

Connected: DeFi sees its biggest hack in 2023 as Euler loses $197M: Finance redefined

DeFi platforms have experienced several attacks in the recent past.

Decentralized Finance Total Value Lock (TVL). Source: dapradar

The biggest DeFi hack so far this year was reported on March 13, with Euler Finance facing a flash loan attack involving over $196 million in DAI, USDC, Stake Ether (STETH) and Wrapped Bitcoin (WBTC). Was lying.

Meanwhile, in November 2022, DeFi trading platform Mango Markets saw an exploiter allegedly take advantage of their low liquidity to “extort funds.”

Essentially the hacker deposited $5 million of his own money into the platform to increase the price of MNGO from $0.03 to $0.91, increasing his MNGO holdings to $423 million.

From there, the exploiter was able to obtain a $116 million loan using multiple tokens on the platform, including Bitcoin (BTC), Solana (SOL) and Serum (SRM), resulting in the loan draining Mango Markets’ entire liquidity. ,

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