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The US Justice Department is Hunting Down DeFi Hackers

Due to increased criminal crypto activity over the years, the US Department of Justice’s crypto team has started hunting for DeFi hackers. Based on reports, the department is focusing primarily on all possible exploits that revolve around Decentralized Finances (DeFi), as well as chain bridges. The issue has become increasingly concerning considering how North-Korean-based hacking groups, like Lazarus, have popped up in this space.

Throughout 2022, it was reported by multiple sources that North Korean hackers disappeared with crypto assets ranging between the $630 million and $1 billion mark. The recent statement from the Department of Justice suggests that the National Cryptocurrency Enforcement Team would serve as a focal point regarding the tackling of cryptocurrencies, cybercrime, money laundering, and much more.

However, it is important to keep in mind that the Department of Justice did not mention anything specific regarding DeFi platforms. The director of the US Department of Justice, Eun Young Choi, mentioned that the department is specifically after the firms that commit a crime or play a role in hiding the trail of transactions.

It's decentralized finances (DeFi) weak to Hackers?

Similarly, Choi stated how the platform would get the multiplier effect if it decides to go after the course. The multiplier effect, in the discussion, refers to stopping bad actors from profiting from their crimes as a whole.

DeFi Attacks on the Rise

The frequency of attacks in the DeFi space has increased considerably over the previous few years. The greatest DeFi attack of this year took place in March when Euler Finance faced a flash loan attack. As a result, the hacker responsible for the attack took off with more than $196 million in DAI, USDC, stETH, and WBTC.

DeFi Attacks on the Rise

The DeFi trading platform, Mango Markets, was subject to an exploiter taking advantage of its low liquidity levels to drain funds. Before taking advantage, the hacker deposited a sum of almost $5 million of his own money on the platform, which eventually drove the trading price of the MNGO token up to $0.91 from approximately $0.03.

The surge increased the entirety of the MNGO holdings to a whopping $423 million. Following that, the exploiter was able to get a loan of almost $116 million via the use of a number of tokens on the platform which included BTC, SOL, SRM, and countless more. The loan amount eliminated the entire liquidity of Mango Markets. However, the exploiter was later arrested.