U.S. Department of Justice Bolsters Crypto Enforcement to Fight Crime

The global crypto market cap is over $1 trillion. Despite the market’s notorious volatility and the penchant of altcoins to go on extended bear runs, cryptocurrency is more popular than ever. Its popularity is spurred by blockchain technology innovations, which are revolutionising how individuals interact digitally across various industries. With its high levels of financial and transactional activity, the blockchain continues to be heavily targeted by hackers, who often make off with thousands of dollars worth of cryptocurrencies. To this effect, the U.S. Department of Justice has taken steps to bolster its efforts in its fight against cybercrime.

The U.S. Department of Justice Takes Steps to Fight Cybercrime

The U.S. Department of Justice (DOJ) recently announced its intentions to bolster its crypto crime unit. The Computer Crime and Intellectual Property Section (CCIPS) and the National Cryptocurrency Enforcement Team (NCET) have been merged to that effect. The merging of both units will bolster the fight against cybercrime and empower the sector to be more efficient in prosecuting and preventing crypto-linked crimes. As a result of the merger, the number of criminal division attorneys dealing with crypto-related matters has increased significantly. Thus, the unit’s criminal investigation and prosecution capacity has increased considerably. 

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The Plague of Cyber-Theft: 5 High-Profile Hacks

Widespread hacking cases are one of the primary obstacles to cryptocurrency going mainstream as a digital currency. Many high-profile thefts have occurred on the cryptocurrency exchanges, prompting investors to cease using the platforms. Here are five of the most recent high-profile cases:

1. Wormhole Hack

Wormhole is a cross-chain messaging platform that facilitates the building of DeFi apps that span the entire blockchain ecosystem. In February 2022, $325 million was stolen from the platform by hackers via its GitHub repository, with as much as $47 million worth of Solana stolen. To this day, the project’s developers have not retrieved any of the stolen funds.

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2. FTX Hack

The FTX hack is one of the most significant crypto hacks in recent memory. The event is even twice as substantial because it occurred on the same day that the platform filed for Chapter 11 bankruptcy. In November 2022, over $600 million worth of cryptocurrency was stolen from its crypto wallets, with several users affected. Although the platform eventually recovered about $5 billion in cash and liquid securities, its reputation was forever damaged. Its co-founder, Benjamin Bankman-Fried, was arrested on fraud charges and is currently awaiting an October trial.

3. Binance Hack

Cryptocurrency hackers have deep feelers, and not even the world’s largest cryptocurrency exchange by trading volume is safe from its reach. A smart contract bug helped facilitate one of the most significant crypto attacks in history when Binance was hacked for $570 million in October 2022. The BSC Token Hub was the epicentre of the attack, with additional BNB tokens created and 2 million BNB tokens withdrawn.

4. Coincheck Hack

Japanese crypto exchange Coincheck suffered a crypto hack that left it short of $523 million in January 2018. The hack was facilitated by a software vulnerability in its hot wallet. At the time, the hack was the biggest theft in crypto history, and the platform lost most of its customers. Nevertheless, Coincheck successfully rebounded and continues to operate to date.

5. Wintermute Hack

Wintermute, one of the top cryptocurrency market makers, suffered a significant hack in September 2022. The platform lost about $160 million to the hack. In Wintermute’s case, the cyber attack’s impact was twice as bad as the project already owed more than $200 million to multiple counterparties in the DeFi industry. Since then, the company CEO Gaevoy has offered a 10% bounty for the hacker to return the stolen funds. The company CEO also firmly maintains that Wintermute is solvent.

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Conclusion

It has been argued that blockchain platforms boast top security. However, over time, increasingly frequent attacks on major crypto platforms have shattered the myth, with more than $20 billion worth of crypto lost to hackers in 2022 alone. It is hoped that the recent steps taken by the U.S. Department of Justice will help law enforcement agents efficiently counter cybercrime threats in the blockchain space.

Frequently Asked Questions

Is the Blockchain Completely Secure?

While the technology inherent in blockchain technology makes it more secure and robust than most centralised financial systems, it is by no means foolproof. While it is hard for a single user controlling a single node to hack an entire blockchain, a single user could potentially steal crypto off a blockchain if they managed to control up to 51% of the network.

How Can I Prevent Crypto Theft?

Although some small element of risk remains, it is possible to prevent crypto theft by keeping all sensitive credentials safe, especially your crypto wallet keys. Rather than leaving your funds on an exchange, you should always withdraw them into a custodial or non-custodial wallet. Even better, you can invest in a hardware wallet to store your crypto keys.

Is It Possible to Recover Stolen Crypto Funds?

Yes, it is possible to recover stolen crypto funds. First, you must gather as much information about the event as possible and forward the details to a crypto forensic service. Digital transactions always leave traces, so depending on how diligent the hacker is, there will be a trail to follow, which may lead to recovering the stolen crypto assets.