The U.S. Department of Justice’s (DOJ’s) decision to name veteran cybersecurity expert Eun-Young Choi as the director of its National Cryptocurrency Enforcement Team in winter 2022 may have been a first indicator of the U.S. Government’s recently antagonistic approach towards the crypto industry. NCET, the enforcement team that is now focusing on cyber and money laundering in crypto, had the task of ensuring that users are safe as the technology around digital assets continues to grow and evolve, as Choi, a former federal prosecutor for the Southern District of New York , said at the time.

This article is an excerpt from The Node, CoinDesk’s daily roundup on the most important stories in blockchain and cryptocurrency news. Subscribe to the full newsletter by clicking here.

As the crypto-financial tide swept out, it revealed all those “swimming naked” (as Warren Buffett says). Choi’s team seems to be more focused on smaller issues, such as social media scammers and darknet misuse, than on major scandals, like FTX or 3AC. These are things that are rarely discussed, but exist in the background for those who spend time on Crypto Twitter and Discord. Paul Dylan-Ennis is a frequent contributor at CoinDesk and calls this cryptocurrency’s “trash pond,” that seems to fill up anywhere crypto is discussed on the internet.

Even though scams such as these only affect one victim at a given time, they can be very lucrative. NCET and other agencies raked in upwards of $112,000,000 by busting six U.S. scams. According to the Federal Bureau of Investigation, $3.31 billion will be stolen in 2022 by investment fraud. Crypto-related scams account for over a third of this amount ($2.57billion). The proliferation of “confidence games” – in which bad actors are required to build long-term relationships with their targets and gain trust – has damaged the reputation of crypto.

Chainalysis, the company that collects the data on crypto-related crimes, says that less than 1% (or a total of a billion dollars) of all crypto transactions are linked to illegal use. This is a significant point that advocates of the industry will not let you forget. Reuters reports that most people who use crypto do so for trading. the adoption of cryptocurrency is growing in countries which are “inflation-weary”, such as Turkey and Argentina. As much as people would like to believe that Chainalysis is the God of crypto and crime, the figures it provides are more likely conservative estimates based on a limited number blockchain addresses.


Choi, a spokesperson for the NCET, said that cryptocurrency and digital assets are affecting every criminal activity they investigate. This includes ransomware, confidence games, and sanctions evasion.

The U.S. Treasury Department said that it was not concerned that blockchain could be used to evade economic sanctions on Russia. A ledger that is immutable (i.e. A blockchain is an awful tool for criminals. This statement should be taken as a bit of a joke. Choi’s organization was created to study crypto-related crimes, so it’s not surprising that it finds crypto-related crimes. But the statement is a realisation.

It’s worth discussing all of this because there is often a disconnect in the claims made about crypto compared to the reality. “only 1 percent of crypto use is criminal,” may say one thing, but the anecdotal evidence would suggest otherwise. You probably know someone who has been SIM-swapped, rug-pulled, and purchased drugs with bitcoin. Choi says that people are susceptible to crypto fraud because of misinformation surrounding the technology, such as hype and ‘s “FOMO”.

Crypto is still needed because it attracts scammers, hype-men and other bad actors. Crypto is an open-source technology, which makes it vulnerable to abuse. Bitcoin is a powerful currency because it allows you to pay your enemies. If it weren’t revolutionary, then it wouldn’t have the same power. It’s good that Chainalysis has shattered any illusion about bitcoin being private, as it helps bring expectations closer to reality. It’s also not a bad idea that, in a world where there are police officers, some of them focus their attention on surveillance. It’s open and public. It’s bound happen.

Crypto insiders need to be smart and come up with an idea to dredge this moat.