Most cryptocurrency users have a sophisticated understanding of the unique characteristics that fuel the appeal of virtual currency. However, the same characteristics that make cryptocurrency attractive to investors have raised government suspicion and led to heightened investigation and prosecution of cryptocurrency activities. Cryptocurrency fraud is a popular target, and the federal government has stepped up enforcement efforts to investigate and prosecute potentially fraudulent activities that involve cryptocurrencies.

Criminal charges for cryptocurrency activities take many forms and often overlap with allegations of money laundering, securities fraud, wire fraud, tax fraud, or theft. If you believe you are under investigation or have been charged with a cryptocurrency crime, an experienced white-collar federal criminal defense attorney can help you understand the specific nature of the charges, provide advice and guidance to help you navigate the federal criminal legal system, and work to obtain optimal results in your case.

For more than 30 years, federal criminal defense attorney Hope Lefeber has represented people charged with fraud and other white-collar crimes. She began her career as an enforcement attorney with the Securities and Exchange Commission. Today, she uses that experience to defend people facing federal criminal charges for financial crimes.

Contact the Law Offices of Hope Lefeber today to schedule a confidential appointment to discuss your situation and how she can help.

Jurisdiction Over Cryptocurrency Crimes

Cryptocurrency fraud refers to illegal activities involving cryptocurrencies or blockchain technologies, including trading cryptocurrency for traditional currency or other digital assets. Depending on the circumstances, the SEC, CTF, and IRS have all asserted regulatory control over cryptocurrencies.

• For the SEC to assert jurisdiction, the cryptocurrency must qualify as a security and involve the “investment of money in a common enterprise with a reasonable expectation of profits to be derived from the entrepreneurial or managerial efforts of others.”
• The CTF asserts jurisdiction over crimes that use cryptocurrency as a commodity under the Commodity Exchange.
• The IRS has asserted jurisdiction over cryptocurrency crimes, claiming cryptocurrency investments should be treated like assets for tax purposes. Through its Criminal Investigations Division, the IRS has pursued money laundering charges for crimes involving the use of cryptocurrency.

Types of Cryptocurrency Fraud

Federal investigators carefully scrutinize cryptocurrency activities and are on the lookout for financial crimes that involve cryptocurrency. In some situations, the government has attempted to criminalize legitimate business activities that use cryptocurrency. Here are common cryptocurrency crimes the government investigates.

Financial Crimes

The government is stepping up its investigation and enforcement efforts regarding cryptocurrency use and has targeted cryptocurrency users for financial crimes like tax fraud, money laundering, and bribery.

Scam Initial Coin Offerings

Initial Coin Offerings, or ICOs (the first time a particular cryptocurrency is offered for sale), may bring heightened scrutiny, as individuals promoting these offerings often use aggressive tactics and inappropriately optimistic projections of outcomes to unsuspecting investors.

Pump and Dump Schemes

In a pump and dump scheme, owners drive up the price before selling off their holdings at an artificial peak. Securities fraud may occur when false claims hype up demand for the cryptocurrency and cause the originators or dominant holders to earn large profits.

Market Manipulation

Market manipulation occurs when people use illegal or deceptive practices to artificially influence the price or supply of a financial asset to create the misleading appearance of market activity. Common market manipulation tactics involve spoofing, front-running, wash sales, and other schemes.

Ponzi Schemes

A Ponzi scheme promises investors high returns with little risk, when the profits are actually coming from other investors. New investors generate artificially inflated returns for early adopters. The scheme eventually collapses when new investments dry up.

Theft

Cryptocurrency investments have created new opportunities for traditional theft. Crypto theft may involve phishing (stealing someone else’s digital assets by enticing them to enter their login credentials), setting up fake wallets to bilk counterparties, using malware or ransomware to demand payment, or hacking a cryptocurrency exchange.

Broker/Dealer Fraud

Depending on their circumstances, exchanges and funds that invest in cryptocurrency may be required to register as broker/dealers.

Unscrupulous Promoters

The SEC has pursued high-profile cryptocurrency investors for failure to disclose payments they received in ICOs and making misrepresentations to lure investors.

How the Law Offices of Hope Lefeber Can Help

If you believe you are under investigation or have been charged with a crime because of your use of cryptocurrency or other digital assets, you need an experienced cryptocurrency fraud lawyer on your side.

Hope Lefeber has over 30 years experience defending people accused of financial crimes in federal court. She will guide you through the complex and high-stakes process of defending against a financial crime prosecution in federal court as she works to achieve optimal results. Ms. Lefeber provides comprehensive and aggressive legal representation and takes a proactive and meticulous approach to every case she handles.

Contact the Law Offices of Hope Lefeber Today

Contact the Law Offices of Hope Lefeber today to schedule a free and confidential appointment to discuss your situation.