US DoJ promises action against crypto platforms partaking in illegal behavior

• The DoJ is taking action against crypto exchanges that enable crimes such as money laundering.
• Taking action sends a warning message to organizations that do not comply with anti-money laundering or customer identification rules.

The US Department of Justice (DoJ) is taking action against crypto exchanges along with “mixers and tumblers” hiding traces of transactions.

According to a recent Financial Times report, the country’s leading cryptocurrency enforcement agency has announced a crackdown on illegal behavior on digital platforms, claiming that the rate of crypto crime has grown dramatically in the last four years.

The DoJ targets crypto exchanges as well as “mixers and tumblers” that hide transaction tracks, according to Eun Young, director of the national cryptocurrency enforcement team (NCET). The department also targets businesses that commit or condone crimes such as money laundering.

Choi said:

“They allow all other criminals to easily profit from their crimes and monetize in ways that are obviously problematic for us,”

He added that the emphasis on the platform will convey a message of prevention to organizations that do not invest in robust compliance and risk mitigation procedures and do not comply with anti-money laundering or customer identification rules.

Choi continued:

“We’ve seen the scale and scope of digital assets used in various illicit ways growing significantly over, say, the last four years… I think that’s coincided with a massive increase in public adoption.”

The DoJ is reportedly also focused on theft and hacking involving decentralized finance (DeFi), particularly “chain bridges” where users can trade different types of digital tokens or embryonic companies with vulnerable code.

Under the Biden Administration, the DoJ’s crypto enforcement unit has emerged as one of the most violent government agencies on crypto in the world.

There is a fear in the industry of a tougher attack on companies with systemic interests, such as Binance [BNB], further destabilizing the industry. However, Choi emphasized that if a company has gained a sizeable market share in part by violating US criminal law, the Department cannot take action against them.