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Cryptocurrency theft, scams and attacks are considered “serious national security concerns” by the director of the National Cryptocurrency Enforcement Team (NCET), Eun Young Choi.
Data from the American blockchain analysis firm Chianalysis listed 11 different attacks from decentralized finance (DeFi) protocols amounting to more than $718 million in the first two weeks of October.
“October is now the biggest month in the biggest year ever for hacking activity, with more than half the month still to go. So far this month, $718 million has been stolen from #DeFi protocols across 11 different hacks,” Chainalysis tweeted on Oct. 13.
According to the firm, this year “will likely surpass 2021 as the biggest year for hacking on record.” “So far, hackers have grossed over $3 billion across 125 hacks,” it added. Malicious actors, exploiters, and hackers have launched multiple attacks on different protocols and shown a lot of illicit activities despite the bear market.
“These are serious national security concerns that really stretch beyond the fact that there are millions of dollars being stolen in single episodes that we see with the DeFi hacks and exploits,” Department of Justice’s NCET director Choi said during the Yahoo Finance’s All Markets Summit.
The team, which was formed over a year ago, was established as the federal agency’s arm in the emerging industry of cryptocurrency. Since its founding, NCET has aided in the seizure of more than $3.8 billion worth of stolen crypto assets in 2022.
“Early days, it was darknet markets and it was people buying and selling all sorts of contraband, these days, we’re seeing [crypto] pop up in any every single type of criminal activity the department looks into,” the director said. “These transactions can oftentimes be relatively frictionless and quick, but it also means that if we identify a particular transaction as being criminal, we can’t go to some centralized, you know, financial institution and ask for that money to come back,” Choi added.
The director admitted that cryptocurrency cases can be different, NCET prosecutes these cases similarly to the way the Justice Department goes after criminal activities concerning commodities, stocks, and other assets. The executive acknowledged her team plays a crucial role in cutting down the high number of crypto crimes currently infesting the industry.
“We have to work with the private sector and ensure that they understand the ways in which we’ve identified particular tactics that bad actors might be using in order to exploit these types of platforms,” she said in the interview.
“The industry is still, in our view, in a maturation phase and in a lot of respects we’re looking at companies and hoping that they will understand that doing things such as basic risk reduction, having robust compliance programs and ensuring that they are decreasing the opportunities for these types of exploits on their own platform is the first, best line of defense,” the director added.
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