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SEC Keeps Crypto Fraud in Its Sights Through Expanded Enforcement Team

Posted  05/4/22
The SEC announced on May 3 that it was dramatically expanding its Cyber Unit and renaming the team the Crypto Assets and Cyber Unit.  The newly enlarged team will now include fully 50 enforcement personnel. The expanded team shows that the SEC is continuing to see crypto fraud as a major enforcement priority.  As the number of digital currencies continue to grow and the increasing number of new investors in the...

SEC Hits Crypto Firm BlockFi with $100 Million in Penalties

Posted  02/22/22
Assorted Crypto Coins
The SEC recently announced cryptocurrency financial institution BlockFi agreed to pay $100 million to resolve charges it violated securities laws. Half the penalties will go to the SEC, and the other half will go to 32 states that brought similar charges. The settlement represents the largest recorded penalties the Commission has ever imposed on a crypto firm. It also sends a clear message the SEC will not shy away...

Top Ten SEC and CFTC Recoveries of 2021

Posted  01/7/22
Top Ten Sign with Letters
As we recently detailed, 2021 proved to be a blockbuster year for whistleblowers under the CFTC and SEC Whistleblower ProgramsSeven of the ten largest whistleblower awards of 2021 were made to SEC and CFTC whistleblowers, including a massive $200 million CFTC award that was roughly twice as large as all prior CFTC awards combined.  In total, the SEC paid more awards—both in total dollars and individual...

Is the privatization of whistleblower programs a trend?

Posted  12/3/21
various cryptocurrency on table
Tether is a type of cryptocurrency known as a “stablecoin.”  That means, in theory, that anyone buying Tether is promised Tether holds an equal amount of U.S. currency to back up your crypto purchases.  There’s just one problem with that:  no one has seen any proof that Tether actually holds anywhere close to sufficient currency to back up the billions in stablecoins traded.  All Tether has offered is an...

SEC Chairman Views Cryptocurrency Markets as the “Wild West” and Calls for More Investor Protection

Posted  08/13/21
Cryptocurrency and US Hundred Dollar Bills Scattered Around
During a recent speech discussing the intersection of national security with cryptocurrencies at the Aspen Security Forum, Gary Gensler, the new Chairman of the Securities and Exchange Commission (SEC), made clear the SEC will use its broad powers to continue protecting investors from the volatility associated with cryptocurrency markets which he characterized as the “Wild West.”  He also urged Congress to grant...

How will regulators respond to Bitcoin’s price fluctuations?

Posted  05/18/21
Bitcoins stacked with stocks rising
The price of Bitcoin—never stable—has become even more erratic in the last month.  From April 17 to May 17, the price fell 26%.  Such a huge drop would be noteworthy in a stock investment.  But in something claiming to be a currency, that kind of instability is normally only seen in times of crisis and hyperinflation.  Coming just as cryptocurrencies are making a play to be considered mainstream, this latest...

CFTC Clobbers Cryptocurrency Con Man

Posted  04/1/21
cryptocurrency scam
Last week, the CFTC announced that a federal court entered a nearly $600 million default judgment against a British man who used bitcoin to defraud more than 1,000 people worldwide.  The judgment is yet another indication that the CFTC will vigorously police cryptocurrency fraud.

The Scam

The CFTC filed a complaint against Benjamin Reynolds and his bitcoin trading and investment company, Control-Finance, back in...

Top Ten SEC and CFTC Recoveries of 2020

Posted  01/15/21
top ten list
Despite its many shortcomings, 2020 did bring great news for whistleblowers: record-breaking growth in the CFTC and SEC Whistleblower Programs, as well as massive enforcement actions by both agencies.  In this post, we will detail the Top Ten SEC and CFTC recoveries of 2020 in cases other than FCPA enforcement.  As detailed below, the SEC netted billions of dollars in penalties and restitution from companies accused...

COVID Leaves Bags of Illicit Cash with Nowhere to Go

Posted  05/15/20
pinned money on a clothes line
Few people may have given much thought to the actual mechanics of money laundering beyond rooting (or not) for Skyler and Walt’s carwash business.  Many non-television criminals do, in fact, use otherwise legitimate small businesses to “launder” their money, mixing ill-gotten gains in with legitimate profits.  The shutdown of the international economy has thus had a surprising consequence: illicit funds have...

Catch of the Week: SEC Hits Actor Steven Seagal for Improper ICO Promotion

Posted  03/6/20
bitcoin currency
This week’s Catch of the Week goes to the SEC for securing over $300,000 recovery from actor Steven Seagal in connection with his alleged failure to disclose payments he received for promoting an initial coin offering (ICO) conducted by Bitcoiin2Gen (B2G).   The settlement is part of the SEC’s broader effort to combat the role of celebrities in promoting novel—and sometimes fraudulent—cryptocurrency...
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