More than 34 million Americans have used some form of crypto in the last year. As that number grows, so does the number of people who will find themselves victims of crypto-related crime. For years, this crime was closely associated with money laundering, illegal activity on the dark web, and ransom demands. But as three experts tell Roundtable's Rob Nelson, crypto crime can take a number of other, more pedestrian forms, and continues to grow along with the use of digital currencies. In this segment, the panel discusses how even savvy investors can get taken for a ride on the blockchain if they aren't careful.
"Anytime a new technology is invented, it's immediately used for pornography and for crime," says Jeffrey Alberts, a partner in the litigation group of law firm Pryor, Cashman.
He continues, "The biggest type [of crime] is just selling [investors] tokens and, and saying these tokens are gonna be really valuable. They're based on an incredibly powerful technology. A lot of times people that are very sophisticated in certain types of investment won't know anything about the blockchain environment and they're easily fooled. These are the same people that were very sophisticated and invested with [convicted Ponzi-fund fraud Bernard] Madoff. So even though people are sophisticated and they're managing large funds, that doesn't mean criminals can't take advantage of them."
Tracy Hoyos-Lopez adds, "[Often,] celebrities are talking about things that they don't know anything about. They don't know about cryptocurrency. They don't know about NFTs, and they're pushing these projects for clout, for attention, for whatnot. And then what's happening is that they're pulling the rug."
"All of these people are losing their money," she says. "And we know there are a fair amount of celebrities that keep doing this over and over and over again. It's the community now that has to go to social media and say 'stop investing in this project.' It's not until the DOJ and the US Attorney's offices across the country start both investigating and prosecuting these cases. This is a new area of law and not everybody knows how to investigate and prosecute it."
Recommended for You
Watch the full discussion below:
Jeffrey Alberts, Partner, Pryor's Cashman Litigation Group
Tracy Hoyos-Lopez, Attorney
David Nissman, Attorney