Cryptocurrencies have exploded in popularity in recent years. More and more people are entering the web’s crypto markets, all in hopes of becoming the next “Bitcoin millionaires.”
With millions of people now actively trading in cryptocurrencies, these markets have now come under the microscope of federal investigators. Cryptocurrencies like Ethereum, Ripple and Bitcoin can be used in and used for criminal activity, and agencies like the FBI are moving to aggressively prosecute cryptocurrency crimes.
The federal government works quickly and aggressively. They never “go easy.” If you believe you are a suspect in a federal investigation for a cryptocurrency related crime, it’s important to speak with a defense attorney as soon as possible.
How does the government treat cryptocurrency?
As you probably know, cryptocurrencies are decentralized and they are not regulated by any central government agency. So, how does the government get involved?
The federal government is responsible for investigating and prosecuting crimes that cross state or national boundaries. Because most internet crimes involve connections to servers that are not in the defendant’s home state, they can fall under federal jurisdiction.
Example: A Bitcoin trader in California used the now-defunct marketplace Mt. Gox for money laundering. Because Mt. Gox’s servers were located in Japan, that trader’s money laundering activities would likely be investigated by a federal agency.
Cryptocurrency investigations are then investigated like any federal investigation. Federal agents will gather evidence against you, and once they have collected sufficient evidence, they can bring charges against you.
Money laundering with cryptocurrency
There is a common misconception that cryptocurrencies are anonymous. As a result, it has become an attractive tool for engaging in money laundering.
However, crypto transactions aren’t anonymous at all. In fact, all transaction records are stored in the blockchain and are publicly visible.
Determined crypto money launderers can run their holdings through “tumblers” (also known as “mixers”) or trade them on unregulated exchanges in an effort to hide their cash. It seems easy enough, but we’ve seen that the FBI has become much more sophisticated in how it traces and investigates money laundering cases.
As an example, two men pleaded guilty in April 2019 to laundering $2.8 million in drug money through Bitcoin.
Cryptocurrency fraud or theft
As we mentioned above, millions of casual investors have jumped into cryptocurrency markets over the last few years.
In that time, federal agencies have stepped up their enforcement of fraud and theft cases. How does it work? As one example, cryptocurrency thieves have been observed seeding the internet with fake “crypto customer support” numbers.
When an investor runs into an issue and starts looking for support, they search the open web and run across one of these phony numbers.
The thief then asks for access to the user’s digital “wallet” to transfer the currency to a temporary wallet while maintenance is performed. It is never returned.
How do I know if the federal government is investigating me?
Federal investigations are conducted in secret. Documents will remain classified and agents will remain silent about investigations typically until the government is almost ready to bring charges against someone. This can take months or even years.
How do you know if the federal government is investigating you?
- You have been contacted by a federal agent by phone and asked for a meeting
- You have received a formal target letter, notifying you that you are the target of a federal investigation
- Agents appear unannounced at your home, place of business or other location you frequent
- You receive a grand jury subpoena
- Your associates are interviewed or approached by federal investigators
If any of the above has happened to you or you otherwise believe that you are being investigated by the federal government, it is critical to speak with a federal defense attorney as soon as possible.
Defenses against cryptocurrency charges
“Robert Helfend is one of the best criminal defense attorneys I’ve ever worked with. He was so knowledgeable, and always made sure I understood everything every step of the way. I would definitely recommend him to anyone who wants an understanding, caring, and truly helpful lawyer.”Pat, CA
Federal investigations are no joke. The federal penalty for wire fraud, for example, includes up to 20 years in federal prison and up to $250,000 in fines.
The good news is that cryptocurrencies are still very new. Technologies are quickly evolving, and it’s sometimes very hard to implicate someone in a cryptocurrency crime beyond a reasonable doubt.
If you are facing federal investigation, speak with an attorney before agreeing to an interview with federal agents.
As a National Trial Lawyers Top 100 and SuperLawyers rated attorney, Robert M. Helfend has remained at the forefront of cryptocurrency cases. We can work with you to assess your situation, gather evidence and build a defense to protect your freedom. Call today — 800-834-6434.