US Justice Department looking for DeFi hackers and thieves: Report

Simar Marwaha
Simar Marwaha
Published on May 15, 2023 02:33 PM

North Korean hackers are thought to have stolen cryptocurrency assets valued between $630 million and $1 billion in 2022, according to an official piece from February.

US Justice Department looking for DeFi hackers and thieves: Report
Source: Medium

In response to a four-year increase in illegal cryptocurrency activities, the US Department of Justice's (DOJ) crypto tsar is taking action against hackers and exploiters of Decentralised Finance (DeFi).

Eun Young Choi, the National Cryptocurrency Enforcement Team's (NCET) chief, revealed in a Financial Times article that the government is concentrating on thefts and breaches utilizing DeFi, "particularly chain bridges."

Report: US Justice Department looking for DeFi hackers and thieves

The US Department of Justice's (DOJ) crypto tsar is taking action against hackers and Decentralised Finance (DeFi) exploiters in response to a four-year rise in unlawful cryptocurrency operations. According to Eun Young Choi, the leader of the National Cryptocurrency Enforcement Team (NCET), the government is focusing on thefts and breaches involving DeFi, "particularly chain bridges."

In light of the fact that North Korean "state-sponsored hackers" had become "key actors in this space," Choi said it was a "pretty significant issue" for the DOJ.

According to a February article from Cointelegraph, North Korean hackers are suspected of stealing crypto assets worth between $630 million and $1 billion in 2022. In February 2022, the DoJ appointed Choi, a prosecutor with almost ten years of agency experience, as the NCET's inaugural director.

The NCET would act as a "focal point" for the DOJ in addressing cryptocurrencies, cybercrime, money laundering, and forfeiture, according to a statement from the department at the time.

Although the DOJ said that "mixing and tumbling services" would be a specific emphasis for the organization, DeFi platforms were not mentioned at the time.

During a recent appearance at the Financial Times Crypto and Digital Assets Summit, Choi reaffirmed that the DOJ is targeting cryptocurrency businesses that either commit the crime or choose to ignore it in order to "obscure the trail of transactions." She observed:

"The DOJ targets businesses that either engage in criminal activity themselves or facilitate it, such as money laundering."

The platform itself, she said, is the "source," and attacking it will have a "multiplier effect" in that it would make it more challenging for "criminal actors to easily profit from their crimes."

Choi said that the "scale and scope of digital assets being used in a variety of illicit ways" has increased dramatically during the previous four years. DeFi systems have recently been the target of several assaults.

On March 13, it was revealed that Euler Finance had been the target of the largest DeFi breach to far this year, which resulted in the theft of approximately $196 million in Dai, USD Coin, staked Ether (stETH), and wrapped Bitcoin (WBTC). Mango Markets, a DeFi trading platform, purportedly witnessed an exploiter in November 2022 use its limited liquidity to "drain funds."

By contributing $5 million of their own funds to the platform, the hacker increased their MNGO holdings to $423 million and increased the value of the network's native Mango (MNGO) token from $0.03 to $0.91.

From there, the fraudster was able to obtain a loan for $116 million using a variety of platform tokens, including Bitcoin, Solana, and Serum (SRM), which completely erased Mango Markets' liquidity.




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