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Cryptocurrency fraud leads to serious legal issues

On Behalf of | Sep 10, 2020 | White Collar Crimes

The cryptocurrency industry, which involves Bitcoin and the like, has attracted a lot of attention from investors over the last few years. Unfortunately, cryptocurrency has also become associated with fraud. As a result, state and federal agencies taking a hard stand against this type of behavior in the industry.

In a recent case out of California that made national headlines, a man pleaded guilty to criminal charges in relation to a cryptocurrency mining scheme that’s estimated to involve at least $722 million. Prosecutors for the United States government note that this was a Ponzi scheme that utilized high-tech methods.

The scheme the man was involved in allegedly ran from April of 2014 through December of 2019. He was accused of promoting the data-mining scheme to investors across the world. It was considered a Ponzi scheme because investors were encouraged to recruit new investors to earn rewards. Cryptocurrency mining involves trying to solve complex algorithms using software in exchange for newly issued Bitcoins, but this scheme was largely bogus.

The charges he pleaded guilty to include one regarding a false tax return and another for conspiring to offer and sell unregistered securities. The case stems from the activities of the BitClub Network. There were four other men who were also charged for this same matter. One of them has also pleaded guilty, and the ringleader will be sentenced in January.

Cases like this show that it’s easy to get caught up in online fraud — even if you don’t intend to do anything wrong. Anyone who’s facing charges related to any securities-related matter should consult their attorney immediately. It’s often possible to begin working on a defense strategy before the charges are actually levied against you. Learning your options as early as possible may help you to decide how to handle the matter, and your attorney can work to ensure that your interests are protected throughout the case. 

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