- Exchanges that operate illegally or allow illegal activity are targeted.
- The Department of Justice wants to free criminals from cryptocurrency.
- All exchanges, regardless of size, are in the firing line.
Still the United States hostile regulatory environment As for cryptocurrency exchanges and companies, the Department of Justice (DOJ) has now announced that it is stepping up its crackdown in the space.
Eun Young Choi, director of the National Cryptocurrency Enforcement Team at DDOJ, told financial times that her team is targeting cryptocurrency exchanges and “mixers and acrobats” in an effort to crack down on illegal activities.
Are the exchanges in the firing line?
While it might be assumed that US agencies are indeed targeting exchanges given the SEC’s moves against cryptocurrencies, it is the DOJ’s mandate to crack down on cryptocrime.
The DOJ believes exchanges and other companies are committing crypto crimes but also those that “allow all other criminal actors to easily profit from their crimes and disburse the funds, Choi.” Tell Financial Times.
Choi added, “We hope that by focusing on those types of platforms, we will have a multiplier effect.”
Focusing on crimes and direct crimes committed on the platforms will put exchanges and other services in a compromising position. Many exchanges already have safeguards in place to stop cases of illegal use of cryptocurrencies. However, it is less prominent on mixers and tumblers.
Will the campaign help the cryptocurrency industry?
The United States has emerged as one of the jurisdictions with the strictest stance on cryptocurrencies worldwide. This mode is meant to protect users, but many argue it stifles innovation. However, the DOJ also says it is focusing on thefts and hacks involving decentralized finance (DeFi).
Choi highlighted chain bridges as a particular area the team is looking into. This comes after the Ministry of Justice Accused Man accused of defrauding DeFi Mango Markets of $110 million in cryptocurrency.
The motives of repression seem to be in the right place. However, enforcement by US agencies is still “regulation by enforcement,” making it difficult for companies to know where the compliance lines lie.
Will the Department of Justice take Binance down?
The US is already moving towards suing the world’s largest exchange, Binance, after the CFTC Accused in return for working illegally in the country. Without pointing out any particular company, Choi didn’t seem bothered by the volume.
She said the company’s size is “not something the department will accept” while considering potential fees.
If a company “has amassed a significant market share in part because they’re [avoiding] 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.
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