How is Crypto Fraud Different from Traditional Financial Fraud?

Uninsured and often irreversible crypto transactions are quickly becoming the favored means of payment for scam artists. Unlike traditional financial fraud, which involves traceable and recoverable assets, government investigators seldom expend the resources necessary to help victims of cryptocurrency fraud.

We are different at the Law Offices of Peter Katz. Experienced cryptocurrency attorney Peter Katz is one of a select group of lawyers dedicated to helping victims of crypto fraud recover their assets and hold perpetrators accountable. Discuss pursuing your lost funds with our experienced financial fraud team today by calling (609) 849-3179 or connecting with us online.

Common Fraudulent Cryptocurrency Schemes

In its execution, crypto fraud is not very different from traditional financial fraud. Scam artists often use the same classic schemes and tactics during the ‘pig butchering’ process as they would to engineer traditional financial fraud. These frequently include the following:

• Initial Coin Offering (ICO) Fraud: Scammers convince ‘investors’ to purchase new crypto coins at an introductory rate and abscond with the funds.
• Pump-and-Dump Schemes: These scams involve promoting the purchase of real coins while inflating their value with false data. Once the coins are inflated, the company sells its holdings at a high value and leaves the remaining investors with significant losses.
• Phishing: Many ICOs and crypto investment opportunities are not real. They are simply fronts for phishing scams designed to obtain your personal and financial information.
• Ponzi Schemes and Pyramid Scams: As with traditional financial fraud, crypto scammers also use Ponzi and pyramid schemes. They pay initial investors with the investments from later investors, eventually cashing out and leaving you with nothing.

What makes crypto fraud different from traditional white-collar crimes is the relative lack of oversight and regulations related to cryptocurrency. This makes it hard to trace criminals and recover assets with help from a private cryptocurrency fraud recovery law firm.

Overview of Cryptocurrency Laws and Blockchain Technology

At its core, classic financial fraud involves cash. Cash held in most U.S. bank accounts is FDIC-insured against bank failure up to $250,000. However, crypto investment firms are not banks, and FDIC insurance does not cover crypto failures. Cryptocurrency is also traded using blockchain technology, which allows users to trade and obtain crypto using hard-to-trace pseudonyms.

Many exchanges also occur overseas, triggering jurisdictional issues because cryptocurrencies are still relatively unregulated globally. This leaves victims with limited recovery options unless they retain a dedicated private cryptocurrency fraud law firm.

Hold Scammers Accountable with a Cryptocurrency Recovery Lawyer

The lack of cryptocurrency regulations, in combination with hard-to-trace assets often leaves victims of cryptocurrency fraud without public legal recourse. However, dedicated private cryptocurrency fraud attorney Peter Katz has the time, experience, and resources available to investigate these cases and trace the fraud.

By identifying liable entities or individuals, he can hold scammers and their partners accountable during civil litigation and help investigators identify criminal offenders. Discuss your crypto investment concerns and financial losses with his cryptocurrency recovery team today by calling (609) 849-3179 or connecting with them online.