Cryptocurrency Fraud and Investigation

Cryptocurrency Fraud and Investigation

Due to the often complex and forensic nature of criminal matters involving cryptocurrencies, if you are facing an investigation or prosecution for cryptocurrency fraud, it is vital to engage a Solicitor specialising in this field as early as possible. Bringing cases of this type to a conclusion in the best interests of the accused requires a robust understanding of the different currencies and technologies involved, the accounting practices used, international law and tax regulations in relevant jurisdictions, and case law relating to cryptocurrency. As one of the UK’s most highly-regarded, successful, and busy criminal and regulatory law firms, our Barristers and Solicitors have a wealth of experience in dealing with cryptocurrency investigations and prosecutions. The Legal 500 describes us as

“A forward-thinking firm with its finger on the pulse of the market. Head and shoulders above a lot of the competition. Agile and modern.”

Our modern and agile approach, allied to our experience, expertise, and determination, makes all the difference when it comes to winning cases for our clients, and this is especially so in the area of cryptocurrency law. Not only do our in-house team have the experience and understanding of how to respond immediately to accusations of cryptocurrency fraud, but we also work with the UK’s top forensic experts in the field of cryptocurrency and accounting.

From the first moment you engage our services, we will advise you on key matters such as how to handle search warrants and restraint orders. We will listen carefully to the details of your case, review the evidence available, and recommend a strategy for your defence at the earliest possible opportunity. This is crucial because decisions taken in the first few hours of a cryptocurrency investigation can have a significant impact on the ultimate outcome of the case.

If you instruct our services, you can be assured that we will do all we can to avert prosecution; however, in some cases, a criminal trial is unavoidable. In this event, you can be assured that we will instruct the leading Counsel in this field to provide you with the highest level of representation.

How Can Reeds Help if You Are Facing a Cryptocurrency Investigation?

Reeds have the experience, skills, and contacts to successfully bring your cryptocurrency matter to a quick resolution, including:

  • Enforcement agency investigations involving the Financial Conduct Authority (FCA), the National Crime Agency (NCA), the Serious Fraud Office (SFO), and HMRC.
  • Engaging forensic accountants and cyber/crypto experts if required.
  • Providing advice on how to handle search warrants served against you.
  • Providing onsite assistance if your premises are being searched.
  • Attending interviews and meetings to support and represent you.
  • Providing representation in the event of prosecution by an enforcement agency.

Cryptocurrency Fraud and Investigation

As we have established above, bringing cases of cryptocurrency fraud to a fast and successful resolution requires several specialist skills in the area of domestic and international law, cryptocurrency technology, forensic accounting, and the latest case law.

Our specialist team of cryptocurrency Solicitors will quickly and confidentially intervene to bring your matter under control, making themselves available where and when needed to represent you.

Regardless of the allegations against you, we will be able to intervene and provide you with the expert legal guidance needed, including if you are facing an investigation into alleged:

  • Theft of cryptocurrency from digital wallets or exchanges
  • Initial coin offering (ICO) fraud
  • Money laundering involving cryptocurrency
  • Non-payment of taxes relating to cryptocurrency
  • Breaching of freezing orders
  • Regulatory breaches leading to cryptocurrency theft or fraud

You can be assured that we will handle your cryptocurrency-related matter with the utmost confidence, ensuring that your reputation and that of your business interests are maintained at all times.

 

If you are facing an investigation or prosecution for cryptocurrency fraud, please contact our Cryptocurrency Fraud Solicitors immediately.

 

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FAQ

Cryptocurrency is a type of virtual digital currency (i.e. it does not exist in a physical form) that uses cryptography and blockchain technology.  Blockchain technology ensures that a permanent, unalterable record always exists of the chain of transactions involving cryptocurrencies. Cryptocurrencies such as Bitcoin and Ethereum are not managed centrally; rather, they are distributed and decentralised, meaning that there is no single owner of the currency. While there were just a few cryptocurrencies in existence in 2013, it is now estimated there are over 6,000, and this number is rising rapidly. In addition, their use is increasingly mainstream, with many household names, including online and ‘bricks and mortar’ retailers now accepting them, including Wholefoods, Shopify, Microsoft, Lush, and Etsy.

Cryptocurrency fraud and scams can take many forms, including:

  • Theft of cryptocurrency from a person’s digital wallet by deception.
  • Theft of cryptocurrency by hacking.
  • Fake cryptocurrency investments – typically from fraudsters purporting to be investment managers encouraging investment into fake crypto schemes.
  • Initial coin offering (ICO) scams – whereby investors place funds into a new fake currency which they believe will lead to substantial returns.
  • Cryptomining malware – these are used to attack digital currencies.
  • Money laundering.
  • Ransomware attacks demanding payment in cryptocurrency.

Cryptocurrency fraud can be a criminal offence and/or a civil claim. Due to the police and criminal courts being overworked and the high bar which must be crossed before a criminal prosecution can be brought, many more cryptocurrency fraud claims are being brought before the civil courts.

An increasing number of cryptocurrency fraud cases are now being seen by the courts, and as a result, we now have a much greater understanding of the willingness and powers of the courts to act in such matters. For example, in the 2020 case of Ion Science Ltd v Persons Unknown and others (unreported), 21 December 2020, (Commercial Court), which involved a claim of cryptocurrency ICO fraud and was the first case of its type to go before the Commercial Court, the judge granted a proprietary injunction, a worldwide freezing order, and an ancillary disclosure order against unknown persons, in addition to a Bankers Trust order against the parent companies of two cryptocurrency exchanges.

Our expertise in criminal and civil fraud investigations and cases means that we can bring or defend civil court claims if criminal charges are not pursued.

When deciding a case involving cryptocurrency fraud, the courts will consider:

  • Who was knowingly involved in any cryptocurrency fraud?
  • Against whom it is appropriate to seek relief to freeze crypto assets?
  • Who received assets without having paid the full price for them?
  • Are any “innocent receivers” involved? This is important because when it comes to issuing any proprietary orders, these have to be restricted to assets that these individuals knew, or ought reasonably to have known, did not belong to them.