The US Department of Justice (DOJ) has been focusing its efforts on cracking down on illicit activities involving cryptocurrencies. Eun Young Choi, director of the National Cryptocurrency Enforcement Team (NCET), has pledged to clamp down on trading platforms that enable criminal actors to easily profit from their crimes and cash out, according to a recent report by the Financial Times.
Over the past four years, crypto crime has grown “significantly”, and this has led to the heightened interest of regulatory bodies to ensure compliance and risk mitigation from businesses operating in the space. The DOJ is paying close attention to companies that refrain from adhering to anti-money laundering (AML) or know-your-customer (KYC) regulations or those who fail to establish robust compliance mechanisms.
By directing efforts towards these types of platforms, Choi believes that there will be a “multiplier effect” on combating crypto crime. It is crucial for the industry to maintain a clean image if it wants to continue experiencing an upward growth trajectory and mainstream acceptance.
In addition to targeting trading platforms, the NCET has also set its sights on investment scams. Often referred to as “pig butchering” schemes, these scams involve building relationships with victims over a period of months before fraudulently taking their money. The Federal Bureau of Investigation (FBI) estimated that $3.31 billion was stolen from individuals through investment fraud in 2022, with over $2.5 billion being linked to crypto-related schemes.
Last month, the agency announced that around $112 million from six such scams had been recovered. This showcases the determination of regulatory bodies to address the issue and protect innocent investors from losing their hard-earned money to malicious actors.
While it is vital for regulators to crack down on illicit activities related to cryptocurrencies and maintain a strong focus on compliance and risk mitigation, skeptics argue that increased scrutiny could stifle innovation and hinder the overall growth of the industry. They maintain that a delicate balance between regulation and nurturing development is necessary for the sector to flourish.
As cryptocurrencies continue to gain traction and the market grows, it is evident that a fine line must be drawn between upholding integrity and fostering innovation. Thus, the debate surrounding regulations and their implications continues. In the end, striking the right balance between the two is of the utmost importance for the betterment of the crypto ecosystem and its long-term success.
Source: Coindesk
