U.S. Government Lawyers to Target Individuals and Guardians for Crypto Lawsuits

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A group of high-level US government lawyers has set its priorities for the enforcement and prosecution of individuals and companies who have committed crypto-related crimes.

Enforcement officials from the United States Department of Justice (DoJ), the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) spoke about the direction their agencies will take during the a panel discussion at the American Bar Association’s annual institute on White. Miami pass crime on October 27.

In addition to corporate actors, lawmakers are taking a closer look at individuals according to an event report by Law360. The senior assistant deputy attorney general in the Criminal Division of the Department of Justice, Nicholas McQuaid, has said that prosecuting individuals in white-collar cases is a top priority.

He added that the department was expanding its use of data-driven probes in such cryptocurrency-related cases. The DoJ is forming a specialized group within the FBI to work with its fraud section to help with investigations and prosecutions.

SEC Director of Implementation Gurbir Grewal commented on the agency’s extensive review of unregistered and fraudulent Initial Coin Offerings (ICOs), unregistered crypto exchanges, and loan and reward programs cryptographic. He said “we will make sure these players and actors play by the rules”, before adding:

“That’s why we’re going to take a close look at gatekeepers like auditors and audit firms, lawyers and underwriters. “

In early September, the SEC threatened legal action against Coinbase for its stable return program, Lend. Coinbase has since abandoned plans to launch the service.

The SEC also targeted Terraform Labs CEO Do Kwon with a subpoena in September. Being a resident of South Korea, Kwon challenged it on the grounds that the regulator lacked jurisdiction.

In October 2020, the DoJ filed criminal charges against four BitMEX executives for illegally operating a derivatives exchange, the trial was set for March 2022.

Related: Regulatory & Privacy Issues Follow SEC Threat Against Coinbase

CFTC Acting Director of Enforcement Vincent McGonagle said he was also concerned about digital assets and the decentralized finance (DeFi) sector. He noted that the crypto asset space may not be the only element of illegal activity as other factors may be involved, such as forex:

“In the area of ​​digital assets, we have brought several lawsuits against entities where they offer digital assets, Bitcoin or otherwise on a margin or funding basis.”

Government agencies are clearly stepping up their activities against crypto companies and individuals.

In mid-August, lawmakers urged the SEC and CFTC to form a joint crypto asset task force so they can determine how to “effectively use their current jurisdiction cooperatively.” At the end of September, the CFTC indicted 12 New York crypto options firms for not registering.

On October 18, the New York attorney general’s office ordered cryptocurrency lenders to cease operations. The Celsius crypto lending platform has said it is not one of the two, but rather works with regulators in New York.

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