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Understanding Cryptocurrency Crimes

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Defending Against Digital Fraud Charges

Cryptocurrency has become a popular way to invest and make financial transactions. However, as its use has grown, so have crimes associated with it. Consequently, state and federal courts are taking a hard line against crypto-related crime. Like any other crime, crypto crimes carry steep penalties, including fines and jail time.

If you are facing charges related to cryptocurrency, securing seasoned legal representation is strongly encouraged. Below, we discuss these crimes, who prosecutes them, and what to do if you are charged.

What Are Cryptocurrency Crimes?

Cryptocurrency crimes involve illegal activities using digital currencies like Bitcoin, Ethereum, and others. Generally, crypto crime falls under the broader umbrella of internet crimes, as they involve the use of digital platforms and technologies to execute illegal activities. These crimes often encompass a range of offenses, leveraging digital currencies' anonymous and decentralized nature to evade detection.

Crypto crimes can include:

  • Fraud: This involves deceiving others for personal gain. Examples include Ponzi schemes, where returns are paid to earlier investors using the capital of newer investors, and fake initial coin offerings (ICOs), where fraudsters persuade investors to buy non-existent cryptocurrencies.
  • Money laundering: Criminals use cryptocurrency to hide the origin of illegally obtained money, making it appear legitimate. Due to the anonymous nature of many cryptocurrencies, tracing these transactions can be challenging.
  • Hacking and theft: Cybercriminals target digital wallets and cryptocurrency exchanges to steal funds. Once stolen, these funds can be hard to recover due to the decentralized nature of blockchain technology.
  • Tax evasion: Failing to report cryptocurrency gains to the IRS can lead to charges of tax evasion. The IRS treats cryptocurrency as property, meaning capital gains taxes apply.
  • Ransomware: Criminals use malware to lock users out of their computers or data and demand ransom payments in cryptocurrency. This is a growing concern as more people and organizations fall victim to these attacks.

Who Prosecutes Cryptocurrency Crimes?

Depending on the nature and scope of the offense, both state and federal authorities can prosecute cryptocurrency crimes. At the federal level, Agencies like the FBI, SEC (Securities and Exchange Commission), and IRS actively investigate and prosecute cryptocurrency crimes. The Department of Justice (DOJ) also plays a crucial role, especially in cases involving large amounts or crimes crossing state lines or international borders.

At the state level, State attorneys general and local law enforcement may prosecute crimes like fraud and theft involving smaller amounts or that are local in nature.

What to Do If You Are Charged with a Cryptocurrency Crime

It’s normal to feel anxious or stressed if you’re facing charges, but it’s essential to stay calm. Panicking or acting impulsively can make matters worse. Instead, immediately seek legal representation. This is often the most critical step. Find an experienced criminal defense attorney (like ours at Foley Griffin) who understands both state and federal laws and is experienced in handling internet crimes.

Remain Silent; Don't Discuss Your Case

Avoid discussing the case with anyone other than your attorney, and don't speak to law enforcement or prosecutors without your attorney present. Anything you say can potentially be used against you in court. This includes saying anything to friends, family, or acquaintances. Additionally, do not post anything about your case on social media. Social media posts can be scrutinized by prosecutors and used as evidence against you, potentially undermining your defense strategy.

If you or someone you know is facing charges related to cryptocurrency, contact Foley Griffin today.