With Valentine's Day upon us, the Commodity Futures Trading Commission (CFTC) last week (February 8) issued an Advisory Alert warning for those seeking romance to tread carefully on dating apps and social media. Especially when it comes to strangers asking for financial support or giving investment advice.
The CFTC urged particular caution with promotions for cryptocurrency investments because of the growing risk...
It was an active year for fraud enforcement at the Securities and Exchange Commission (SEC) and Commodities Futures Trading Commission (CFTC). Though by no means was it a record year for either regulator in terms of big-ticket wins. Aside from the CFTC's $1.7 billion recovery from South African crypto company Mirror Trading for foul play with foreign currency transactions, the balance of the Top-10 recoveries was...
Tax fraud can take many forms, but each form results in shortchanging government coffers. More seriously, with our tax system depending heavily on taxpayers’ willingness to voluntarily file tax returns and pay taxes, tax fraud undermines confidence in the system. Enforcement of tax laws builds confidence in the system, and deserves to be a law enforcement priority.
The top tax recoveries in 2022 start with...
In 2022, the SEC and CFTC redoubled their efforts to preserve market integrity and shut down financial frauds. Both in size and composition, the agencies’ major recoveries look quite different from a year prior. 2021 was all about crypto, with four of the top ten recoveries relating to crypto offerings or exchanges. With the recent collapse of the crypto market—exposing some of the biggest frauds since the...
Top Ten Money Laundering Enforcement Actions of 2022
Posted 01/10/23
2022 was a big year for money-laundering enforcement. It marked the first full year that the new FinCEN money laundering whistleblower office was up and running. And, even more remarkably, by the end of the year, the FinCEN program expanded to welcome whistleblowers with information related to sanctions violations after Constantine Cannon attorneys called for this legal change following the Russian invasion of...
Whistleblower associate Liz Soltan, along with Alex Cala of Taxpayers Against Fraud, recently wrote about the massive scale of cryptocurrency fraud on the TAF blog. As use of crypto has increased, so too have scams. Between Jan. 31, 2021 and March 31, 2022, over 46,000 people made reports to the FTC about losing money in crypto fraud, with losses totaling over $1 billion. And that’s just victims who chose to make...
Crypto projects are toying with public funds. The False Claims Act will be a powerful tool in holding them to account
Posted 09/21/22
Last month, the Fairfax County Retirement System shared that they will be putting $70 million of their $6.8 billion fund into two crypto yield farming funds. In other words, pension money that allows teachers, firefighters, and police officers to retire will be invested into volatile digital tokens known as yield-farming projects.
Yield-farming projects offer yields that are significantly higher than those...
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
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...
As we recently detailed, 2021 proved to be a blockbuster year for whistleblowers under the CFTC and SEC Whistleblower Programs. Seven 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...