Understanding Crypto Assets Securities Fraud

Even the White House has acknowledged the benefits of investing in cryptocurrency by creating a United States Digital Asset Stockpile. Crypto investments are legitimate but often hard to regulate. Overseas scammers frequently market false or fraudulent initial coin offerings (ICOs), subject to federal securities regulations.

The government is increasing efforts to crack down on cryptocurrency scams. Suppose you’re being investigated by the Securities and Exchange Commission (SEC) for crypto securities fraud. In that case, you need an experienced federal crypto fraud defense lawyer like Peter Katz.

Securities Regulations are Applicable to Crypto Investments

At its simplest, securities fraud is defined as misleading investors (with false promises or information) into making investments, resulting in financial losses. All investments carry risks, but securities fraud involves an intent to trick investors to steal money or obtain investment funds. Even if you think the investment has value, you might still be charged with securities fraud if you’re not transparent about investment risks.

Cryptocurrency investments, including convincing investors to purchase new crypto during an ICO, are subject to SEC regulations. You may be charged with securities fraud, wire fraud, tax evasion, or theft for engaging in any of the following unlawful activities involving cryptocurrency:

• Pyramid schemes
• Ponzi schemes
• Insider trading
• Stock manipulation
• Boiler room operations
• Embezzlement
• Accounting fraud

The federal government might not insure crypto transactions, but it treats cryptocurrency fraud like traditional securities fraud. As such, you’re subject to criminal penalties if convicted.

Marketing Cryptocurrency Investments

When you market cryptocurrency as an investment, it falls under SEC regulations. You can use traditional marketing techniques, such as finding investors through social media, but you may not create false or misleading posts. This includes spreading rumors about profitability, making inaccurate claims about daily profits, manipulating stock prices through false filings, or “spoofing” websites to make it look like ICOs are from legitimate financial institutions.

Many brokers mistakenly believe that securities regulations do not apply when marketing cryptocurrency investments because of certain digital offerings’ inherent instability. This is not the case. Even overzealously selling legitimate investments may result in federal criminal charges.

An experienced cryptocurrency securities fraud attorney might get your charges dismissed or reduced by sufficiently showing that you had no intent to defraud and merely misunderstood applicable regulations in this new and complex field of law. Defending you against federal securities charges involving crypto might also include showing that your statements were not misleading and proving that you were transparent with investors.

Federal Legal Counsel for White-Collar Crypto Charges

Marketing digital currency investments online is not inherently unlawful, but even one inaccurate post might trigger an SEC investigation. Do not let federal prosecutors intimidate you into paying unreasonable fines or facing significant jail time. They often do this by charging you multiple counts of wire or securities fraud for each allegedly misleading statement, over-criminalizing your conduct to force an unfavorable plea deal.

If you’ve been charged with a securities crime for marketing cryptocurrency investments, contact federal white-collar defense lawyer Peter Katz as soon as possible.