On October 6, 2021, the U.S. Department of Justice announced that it would be creating a National Cryptocurrency Enforcement Team to focus on the investigation and prosecution of criminal activity involving cryptocurrencies like Bitcoin and Ethereum. The taskforce will work on cases related to financial crimes like money laundering and crimes where the proceeds from the sale of contraband are laundered or directly paid out on a virtual currency exchange.
The use of cryptocurrencies for illegal purposes in recent years has been very high. According to the research group, Chainalysis, criminal entities in 2020 engaged in cryptocurrency transactions worth $10 billion, and illicit transactions in 2019 surpassed $20 billion. The majority of these transactions in both years involved “scam” activities like the PlusToken and BitClub Ponzi schemes. The second-largest category of crimes involved Darknet marketplaces like Wall Street Market and Welcome to Video, where vendors sell contraband ranging from drugs to child pornography. Ransomware attacks, which nearly always demand payment in digital coin, are also on the rise—with 220 significant attacks occurring in January through September of this year alone.
DOJ prosecution of these cases has continued to be aggressive in 2021. Significant convictions in fraudulent cryptocurrency schemes have been recently obtained in Texas, California, and New York. In other high-profile cases, defendants have pled guilty to the illegal distribution of prescription drugs and to converting cash into Bitcoin without following the required anti-money-laundering regulations. Related charges have also been brought this year against a cryptocurrency “mixer”—a person who launders the digital money by comingling identifiable funds with anonymous ones—and even against a couple who are accused of being paid in cryptocurrency for acts of espionage.
Despite the large quantity of cryptocurrency funds that are used illicitly, however, over 99% of the cryptocurrency that changed hands last year did so for perfectly legal purposes. Using cryptocurrency is not itself illegal, and so the Government has much more to prove to convict someone of a crime. Because of the largely anonymous nature of many cryptocurrency transactions, that can be a difficult endeavor.
Cryptocurrency cases are extremely complex and require thoughtful, diligent defense. If you or someone you know is accused of committing a crime in connection with digital currency, you need a veteran federal attorney to assist you in untangling the allegations and fighting them in court. For more information on how our team of experienced lawyers can help with your case, contact us today.