Cryptocurrency Fraud Lawyer
Cryptocurrency has exploded in popularity. With millions of people trading in Bitcoin, Ethereum, Dogecoin, Litecoin, and others, users of these cryptocurrencies increasingly come under scrutiny from federal law enforcement agents.
Instead of being issued and backed by a government or central bank, cryptocurrencies are digital assets secured by cryptography that can be used as a medium of exchange. Their validity is typically provided by a blockchain system with an open, distributed ledger recording transactions. Because cryptocurrencies do not use traditional banks, many people mistakenly believe their cryptocurrency transactions are safe from government interference or manipulation or that their transactions are invisible or untouchable. So how does the government become involved?
The federal government is authorized to investigate and prosecute crimes that violate federal laws or cross state or national boundaries. Because most internet transactions involve connections to servers not located in the defendant’s home state, the federal government can exercise interstate jurisdiction and prosecute people for cryptocurrency crimes.
Examples of Cryptocurrency Fraud
Money laundering occurs when a person makes money earned from illegal activities appear as if it was earned legally. While money laundering has historically been accomplished using traditional currency, it can also be committed using cryptocurrencies.
Because cryptocurrencies operate outside of traditional banking channels, many people believe it is more difficult for the federal government to track and prosecute these crimes. However, the federal government has become much more sophisticated in how it traces and tracks cryptocurrency transactions, and now prosecutes people for money laundering using cryptocurrency.
The federal government treats cryptocurrencies as securities. As such, any illegal transaction that uses cryptocurrency is subject to investigation and prosecution for federal securities fraud. There are many different types of securities fraud in connection with cryptocurrencies.
Initial Coin Offerings
The first offering of a particular cryptocurrency for sale, called an Initial Coin Offering, or ICO, can involve fraudulent representations. Many ICO’s are fabricated, with false bios of team members and technical whitepapers copied from other, legitimate cryptocurrencies.
Pump and Dump Schemes
As with traditional securities, crypto also presents the opportunity for pump and dump schemes where owners of a stock try to drive the price up before selling off their holdings at an artificial peak. Whenever false claims hype up demand for the cryptocurrency, causing the originators or dominant holders of the cryptocurrency to earn large profits, it is securities fraud.
Market manipulation occurs when individuals engage in spoofing, front-running, wash sales, and other schemes.
Wire fraud occurs when a person uses telecommunications or information technology to commit a crime. Because cryptocurrencies exist online, any crime involving the use of a cryptocurrency can result in federal wire fraud charges. Ponzi schemes also occur in the cryptocurrency markets when new investments are used to pay off older investors.
Because cryptocurrencies exist on an anonymous digital network, people may use cryptocurrencies to try to avoid paying taxes on income paid in cryptocurrency as well as for payments for goods or services. This can result in charges of tax fraud. In addition, since capital gains from sales of cryptocurrencies is not reported, tax fraud can result from the failure to report these earnings.
Any asset can be stolen, and cryptocurrency is no different. A person can be accused of cryptocurrency theft for 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.
To defend against allegations of cryptocurrency fraud, you need a cryptocurrency fraud defense lawyer who understands the complexities of cryptocurrency technology and exchanges, has a deep and thorough knowledge of the federal laws you are accused of violating, and will meticulously investigate the charges against you to identify the areas where the prosecution’s case falls short.
Contact Hope Lefeber for Cryptocurrency Fraud Defense
As cryptocurrencies continue to increase in popularity, expect a rise in federal prosecutions for cryptocurrency fraud based on the perceived illegal use of cryptocurrency.
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 more than 30 years of experience defending people accused of financial crimes in federal court. She began her career as an enforcement attorney with the United States Securities & Exchange Commission (SEC). Today, she uses that experience to defend people facing criminal charges for financial crimes in federal court.
Ms. Lefeber provides her clients with comprehensive and aggressive legal representation. She takes a proactive and meticulous approach to every case she handles and guides her clients through the complex and high-stakes process of defending against a financial crime prosecution in federal court.
If you need a cryptocurrency fraud lawyer, contact Hope Lefeber today to schedule a free, confidential consultation. Call her at 610-668-7927 or complete the online form.