The Department of Justice’s recent enforcement action against OKX has drawn attention to its expanding role in crypto regulation. While the SEC has traditionally dominated headlines, charging businesses with selling unregistered securities, the DOJ takes a different approach—targeting fraud, market manipulation, and financial crimes involving digital assets.
Many are unfamiliar with the DOJ’s role in crypto, given its lack of a dedicated enforcement unit. However, as this article will explore, the DOJ has prosecuted some of the most consequential crypto cases in recent years. From exchange violations to rug pulls and money laundering, its actions reveal the growing stakes of crypto compliance.
In March 2025, crypto exchange OKX agreed to a $500 million settlement with the DOJ—a hefty penalty that surprised some, given that it came from the DOJ rather than a financial regulator.
During “Chokepoint 2.0”, when President Biden pursued a regulation-by-enforcement agenda, the Securities and Exchange Commission (SEC) was the most aggressive agency in targeting crypto businesses. The SEC prosecuted firms for selling unregistered securities, citing violations of the Howey Test, which defines a security based on four key criteria: (1) investment of money, (2) in a common enterprise, (3) with an expectation of profits, (4) derived from the efforts of others.
Meanwhile, businesses dealing in digital assets classified as commodities—such as futures contracts and derivatives—fell under the jurisdiction of the Commodity Futures Trading Commission (CFTC), which pursued enforcement actions against unregistered commodities trading.
The DOJ, in contrast, does not have a dedicated crypto enforcement division. Instead, cryptocurrency-related cases primarily fall under a specialized unit, the Market Integrity and Major Frauds (MIMF) Unit, which focuses on criminal investigations involving fraud. As the DOJ explains, MIMF prosecutes cases related to “price and market manipulation involving cryptocurrencies; unregistered cryptocurrency exchanges involved in fraud schemes; and insider trading schemes affecting cryptocurrency markets.”
In the case of OKX, the DOJ’s involvement stemmed from the exchange’s failure to prevent illicit transactions and its active solicitation of U.S. users, despite officially stating otherwise.
Since its founding in 2019, the DOJ has prosecuted cryptocurrency fraud cases involving over $2 billion in intended financial losses. While each agency—the SEC, CFTC, and DOJ—operates within its own jurisdiction, they frequently work in parallel to bring enforcement actions against crypto firms, ensuring that regulatory gaps do not allow misconduct to go unchecked.
Over the past five years, the DOJ has intensified enforcement against crypto-related crimes. The following are the most notable cases, covering exchange violations, money laundering, rug pulls, Ponzi schemes, and unregistered stablecoins.
KuCoin
In January 2025, KuCoin agreed to a $300 million penalty for violations similar to those of OKX. Despite being one of the world's largest cryptocurrency exchanges, KuCoin failed to implement adequate Know Your Customer (KYC) and Anti-Money Laundering (AML) procedures, allowing illicit transactions to flow through its platform. Additionally, KuCoin had at least 1.5 million registered U.S. users and earned approximately $184.5 million in fees from them—all while failing to register as a money transmitting business.
While both KuCoin and OKX faced hundreds of millions in fines, the operational impact on KuCoin was far more severe. OKX’s penalty required it to continue employing a consultant to implement compliance measures, such as preventing US users from circumventing geo-blocking. KuCoin, on the other hand, was forced to formally exit the US market for two years, effectively cutting off a key revenue stream. Moreover, two of its founders were indicted, barring them from participating in KuCoin’s operations.
This strategic retreat leaves a power vacuum in the U.S. crypto exchange market, allowing competitors to seize market share while KuCoin remains sidelined. When it eventually attempts to re-enter, it may struggle to regain its foothold—especially without the leadership that once drove its success. KuCoin’s case highlights how regulatory enforcement can cripple businesses beyond financial penalties, demonstrating the long-term consequences of non-compliance in the cryptocurrency industry.
Baller Ape Club
Many of the cases prosecuted by the DOJ are only superficially related to cryptocurrency. While criminals may claim that funds are being raised for crypto mining operations or investment schemes, their actual involvement with digital assets is often nonexistent. Instead, they exploit the buzzword appeal of crypto to attract victims, when in reality, their schemes function no differently than traditional Ponzi schemes or fraudulent investment scams disguised with a modern veneer.
However, some DOJ cases do involve genuinely sophisticated crypto-native criminals. In 2022, for example, the DOJ charged Le Anh Tuan for orchestrating a rug pull involving the “Baller Ape” NFT collection. After selling $2.6 million worth of NFTs, Tuan and his partners vanished with the funds, laundering them through on-chain obfuscation techniques, including chain-hopping and crypto swap services—methods frequently employed by top cybercriminals, such as in the Yei Finance and C.R.E.A.M. Finance hack respectively.
Crypto fraudsters, in short, are not merely charismatic con artists—many possess deep technical expertise in digital assets and money laundering. Tracking their movements requires advanced blockchain analytics tools, which the DOJ increasingly relies on. In Tuan’s case, the agency explicitly stated that its investigative findings were “based on blockchain analytics.”
My Big Coin Pay
In 2022, the DOJ secured a conviction against Randall Crater, the founder of My Big Coin Pay Inc. Crater and his associates falsely marketed My Big Coin as a fully functional cryptocurrency, allegedly backed by $300 million in gold, oil, and other valuable assets. In reality, the tokens were not backed by anything, and Crater misappropriated over $6 million in investor funds.
Crater’s fraud stands out in a landscape dominated by fake mining and investment schemes. Unlike simple Ponzi schemes, creating a fraudulent stablecoin required a degree of criminal ingenuity. With Crypto and AI Czar David Sacks prioritizing stablecoin legislation under President Trump, Crater’s scheme is precisely the kind of deception that new regulations aim to prevent. Any future stablecoin law will likely include provisions for auditing and verifying one-to-one reserves, as well as requiring issuers to register with regulators—safeguards that would have made My Big Coin’s fraud impossible to sustain.
The case also underscores the dual nature of stablecoins. While stablecoins are often hailed as crypto’s "killer use case", they have also been exploited for illicit finance. For instance, the TGR Group used stablecoins to launder funds for Russian elites, demonstrating the risks posed by unregulated digital assets. This enforcement action highlights the need for robust blockchain analytics solutions that can monitor stablecoin transactions and detect illicit activity—a crucial step in ensuring that stablecoins fulfill their promise without becoming a tool for financial crime.
BitMEX
In 2024, BitMEX pleaded guilty to violating the Bank Secrecy Act (BSA), marking a significant enforcement action against the cryptocurrency exchange. Like OKX and KuCoin, BitMEX failed to implement an AML program and knowingly allowed U.S. users on its platform despite regulatory restrictions. However, its most distinctive offense was that it “lied to a bank about the purpose and nature of a subsidiary to allow BITMEX to pump millions of dollars through the U.S. financial system.”
BitMEX likely resorted to deception due to the widespread debanking of crypto businesses, which intensified amid regulatory uncertainty surrounding digital assets. This debanking trend escalated in March 2023 with the closure of Signature Bank, a key financial institution for the crypto industry that operated a blockchain-backed payments platform. The shutdown left many crypto companies without access to traditional banking services, forcing them to seek alternative—and sometimes opaque—methods of transacting within the financial system.
While President Trump has pledged that crypto businesses will have access to banking services under his administration, the $100 million fine eventually imposed on BitMEX in January 2025 underscores a critical reality: regardless of political leadership, cryptocurrency firms will only retain banking access if they meet compliance requirements. BitMEX’s downfall serves as a stark reminder that proper disclosure of business activities, adherence to AML protocols, and regulatory compliance are non-negotiable for maintaining financial legitimacy in the U.S. banking system.
From January to June 2022 alone, the DOJ brought charges against eight defendants and recovered $56 million. While many cases involve fraud using fiat, the DOJ itself emphasizes the role of technology: “Prosecutors use blockchain data analytics and traditional law enforcement techniques,” it states.
For crypto businesses, blockchain analytics is essential for both compliance and avoiding regulatory scrutiny. By leveraging blockchain analytics tools, like those provided by Merkle Science, businesses can track stolen or laundered funds, block transactions with high-risk entities, and trace connections across multiple hops to mitigate exposure to illicit activity.
Moreover, being a centralized exchange does not guarantee compliance. As seen with OKX, KuCoin, and BitMEX, even some of the world’s largest exchanges have flagrantly ignored AML protocols, banking laws, or registration requirements. Blockchain analytics also enables due diligence on prospective partners and counterparties, helping businesses avoid the risks of engaging with non-compliant exchanges that could attract regulatory enforcement.
The DOJ’s aggressive enforcement actions highlight the increasing regulatory risks facing crypto businesses. Compliance isn’t just about avoiding SEC securities violations—it requires proactive fraud detection, transaction monitoring, and due diligence to prevent DOJ scrutiny.
Tools like Merkle Science’s Tracker can help identify illicit activity by tracing stolen funds and tracking on-chain movements. Compass screens wallets and transactions for high-risk exposure based on a fully customizable rule engine, while Know Your Blockchain Business provides due diligence on counterparties to avoid non-compliant exchanges. As crypto enforcement intensifies, businesses must stay ahead. Contact us for a free demo to see how any of these tools can help safeguard your operations.
