The Current State of U.S. Cryptocurrency Crime

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By Ronald Tech

During a time when all eyes were on exchange-traded funds, the U.S. saw significant activity from federal regulators, with charges and sentences being announced for various players in the cryptocurrency space.

State of Crypto presents a comprehensive analysis of the crossroads of cryptocurrency and government. To receive future editions, sign up here.

The Shifting Narrative

Gone are the days when it seemed like an initial coin offering was being sued almost every other week; the crypto legal landscape in January has been relatively tranquil in comparison.

Relevance in the Regulatory Arena

It has become imperative to keep tabs on the latest developments in the realm of regulatory oversight.

Indepth Analysis

  • The U.S. Securities and Exchange Commission has accused Shanchun Huang, the CEO of Future FinTech, of “manipulative trading” and “failing to disclose his beneficial ownership” in the company. This comes after Future FinTech’s acquisition of a Chinese bitcoin mining firm in 2021, even though this wasn’t explicitly mentioned in the SEC complaint. Future FinTech has also branded itself as “a leading blockchain-based e-commerce business” in a press release from that year, although its current website describes it as “a comprehensive financial and digital technology service provider,” which does reference various cryptocurrency elements in its “about us” page.
  • The Commodity Futures Trading Commission has pressed charges against a company named Debiex and an individual named Zhang Cheng Yang for the misappropriation of customer funds.
  • A federal judge has sentenced Marco Ruiz Ochoa, a promoter for IcomTech, to five years in prison, along with two years of supervised release and nearly $1 million in forfeiture. Ochoa’s involvement with IcomTech, a cryptocurrency ponzi scheme, led to his guilty plea for conspiracy to commit wire fraud in September.
  • Raul Rodriguez, who utilized LocalBitcoins to convert bitcoin and other cryptocurrencies for customers, has pleaded guilty to operating an unlicensed money transmitting business. According to the Department of Justice, he converted over $5 million over a period of six years in Florida.
  • Mark Scott, a former partner at law firm Locke Lord LLP, has received a 10-year prison sentence for his involvement in laundering approximately $400 million for OneCoin, a notorious multilevel marketing fraud.
  • Lastly, the Department of Justice has released a statement about Sam Bankman-Fried’s impending sentencing, scheduled for March 28 before Judge Lewis Kaplan. Those considering themselves victims of Bankman-Fried are encouraged to submit a victim impact statement.
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Tuesday

  • The U.K.’s Financial Conduct Authority is approaching a deadline for its stablecoin consultation.

Thursday

  • At 14:00 UTC (9:00 a.m. ET), Treasury Secretary Janet Yellen will present the Financial Stability Oversight Council’s annual report to the Senate Banking Committee.

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Until next week!