The US cryptocurrency enforcement director stated that the US was increasing its inspection of cryptocurrency exchanges in order to target illegal behaviour on the platforms.
The Department of Justice (DOJ) is targeting crypto firms that commit crimes or facilitate crimes such as money laundering, according to Eun Young Choi, director of the agency's National Cryptocurrency Enforcement Team (NCET).
She claimed that the "mixers and tumblers" that conceal the trail of transactions are on the list of targets for crypto exchanges.
“… they’re allowing for all the other criminal actors to easily profit from their crimes and cash out in ways that are obviously problematic to us,” she said.
“And so we hope that by focusing on those types of platforms, we’re going to have a multiplier effect.”
Choi emphasised "pig butchering" scams, which are named from a Chinese word referring to fattening pigs for slaughter and entail scammers cultivating long-term connections with victims.
Last month, the Justice Department confiscated cryptocurrency worth more than $112 million that was tied to such schemes.
Choi stated that the emphasis on platforms would "send a deterrent message" to organisations that are not investing in good compliance and risk mitigation procedures and are circumventing anti-money laundering or customer identification requirements.
“We’re seeing the scale and the scope of digital assets being used in a variety of illicit ways grow significantly over the last, say, four years,” she said.
“I think that is concurrent with the increase of its adoption by the public writ large.”
If a company “has amassed a significant market share in part because they’re flaunting US criminal law”, the DoJ cannot “be in a position where we give someone a pass because they’re saying ‘Well, now we’ve grown to be too big to fail’”, Choi said.
“Think of what message it would send,” she added. “It can’t be the way that we think when it comes to crypto, when it comes to any white-collar crime.”
In March, the DOJ charged Vietnamese national Minh Quoc Nguyen with money laundering and identity theft in connection with the activities of crypto platform ChipMixer, alleging that Nguyen blatantly violated financial regulations.
The DOJ's innovative attack on crypto firms aims to increase this scrutiny, sending a "deterrent message" to organisations that have avoided anti-money laundering or customer identification rules and have not invested in good compliance and risk mitigation measures, according to Choi.
Without naming any specific firm, the NCET director stated that a company's size "is not something that the department will countenance" when evaluating prospective charges.
The Justice Department will also focus on crimes involving decentralised money, specifically "chain bridges" where users can swap various sorts of digital currencies, or embryonic initiatives with susceptible programming, she noted.
By fLEXI tEAM