Are You Fighting Cryptocurrency-Related Criminal Charges?
Cryptocurrency-related charges can take a few different forms. There is some overlap here, with potential criminal charges in the areas of Money Laundering, Securities Fraud, Wire Fraud, Tax Evasion, and simple Theft. Even Drug Trafficking can overlap with Crypto-related criminal charges. We’ll discuss some of these topics here.
Cryptocurrency-Related Charges Rooted in Money Laundering
Money laundering (the Federal Statute lives at 18 U.S.C. § 1956) is, essentially, the concealment of the origins of illegally obtained money, typically by means of transfers involving foreign banks or legitimate businesses.
Practically, money laundering is often accomplished by moving the money through a series of transactions that make it difficult to trace its source. Cryptocurrency is a popular tool for money laundering because it is a digital currency that moves outside traditional banking channels. This makes it difficult for law enforcement to track transactions and identify criminals.
Cryptocurrency-Related Charges Rooted in Securities Fraud
Securites Fraud is a broad area of law. Criminal charges can be triggered by Ponzi schemes, issuance of securities (and the SEC is increasingly sounding the alarm that nearly all Cryptocurrencies are securities), pump and dumps, and more.
Cryptocurrency-Related Charges Rooted in Wire Fraud
Wire Fraud is often employed as an add-on to other white collar or fraud charges. Wire Fraud essentially means a defendant, which committing other crime, used telecommunications or information technology. This is a technical area, and these charges can be defended effectively.
Cryptocurrency-Related Charges Rooted in Tax Evasion
Cryptocurrencies, when bought and sold, are treated for tax purposes like any other short-term or long-term asset. Tax Evasion can be triggered when an individual or entity fails to disclose trades or simply fails to pay an assessed tax.
Cryptocurrency-Related Charges Rooted in Simple Theft
Any asset can yield a criminal charge for theft, and cryptocurrency is no exception.
Cryptocurrency is a digital asset that is vulnerable to theft. There are a number of ways that cryptocurrency can be stolen, including phishing, malware, ransomware, and exchange hacks.
Phishing is a type of scam where the attacker sends a fraudulent email or text message that appears to be from a legitimate source, such as a cryptocurrency exchange or wallet provider. The email or text message will often contain a link that, when clicked, will take the victim to a fake website that looks like the real website. Once the victim enters their login credentials on the fake website, the attacker can steal them.
Malware is software that is designed to harm a computer system. Malware can be installed on a computer through a variety of ways, such as clicking on a malicious link, opening an infected attachment, or downloading a file from an untrusted source. Once malware is installed on a computer, it can steal cryptocurrency by accessing the victim’s cryptocurrency wallets or by mining cryptocurrency on the victim’s computer without their knowledge.
Ransomware is a type of malware that encrypts the victim’s files and demands a ransom payment in cryptocurrency in order to decrypt them. If the victim does not pay the ransom, they may lose access to their files permanently.
Exchange hacks are attacks on cryptocurrency exchanges. Exchanges are websites that allow users to buy, sell, and trade cryptocurrency. Exchanges are often targeted by hackers because they hold large amounts of cryptocurrency. In 2014, the Mt. Gox exchange was hacked and $450 million worth of Bitcoin was stolen (at former prices, the amount is in billions at today’s prices). This was the largest cryptocurrency hack at the time.