U.S. Tipped For Cryptocurrency Fraud Crackdown After State Action
U.S. state authorities have taken action against a cryptocurrency provider and investment platform accused of being a Ponzi scheme and offering fraudulent investment promises, in a move legal experts believe could be a sign of greater activity in the sector.
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“I would expect that we will see a good bit more enforcement activity in 2018 around cryptocurrency platforms in general, and certainly more around platforms that are, like BitConnect, being promoted as something more than a simple payment mechanism,” said Dennis Ehling of Blank Rome.
“Regulators have, understandably, taken a little while to catch-up to the implications of blockchain technologies in financial transactions,” he told PaymentsCompliance.
“But they have been gaining knowledge and understanding over the last couple of years and, I think, are now in a position to start taking enforcement actions that they might have hesitated to bring a few years back.”
Ehling said that enforcement authorities are likely to feel better prepared to intervene in other cases like BitConnect, where “classic elements” of payment fraud were identified.
"U.S. Tipped For Cryptocurrency Fraud Crackdown After State Action," by Fran Warburton was published in Payments Compliance on January 8, 2018.