HomeCryptoSummary of the 2022 cryptocurrency investigations
Summary of the 2022 cryptocurrency investigations
December 28, 2022
In 2022, several major federal indictments, convictions, and seizures related to cryptocurrency were made public in the United States. To understand the extent and nature of government activity in Web3, CertiK conducted research and analysis on the state of federal and regulatory crypto investigations in 2022. Investigating civil and criminal lawsuits related to cryptocurrencies is an important part of Web3’s mission. CertiK to protect the World Web3.
Survey analysis in 2022
CertiK has compiled all publicly available data on cryptocurrency investigations from various law enforcement and regulatory agencies for 2022. It is worth noting that the scope of data collected is limited to investigations that have been publicly disclosed, as many investigations they remain sealed and are not announced.
According to our data, there were a total of 96 public investigations related to cryptocurrencies in 2022. The Federal Bureau of Investigation (FBI) was responsible for the majority of these cases, with 42 investigations accounting for 43.3% of the total. The United States Secret Service (USSS) was the second-highest contributor, with 20 cases, or 20.6% of the total. It is worth noting that the data may include some cases involving inter-agency collaboration. The chart below provides a breakdown of the number of investigations by agency in 2022.
The disclosed status and outcome of cryptocurrency-related investigations varied among different law enforcement agencies and regulatory agencies. Most investigations have resulted in charges and indictments, and some law enforcement agencies have also announced seizures and convictions for their investigations. The Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), which are regulatory agencies, have only announced charges and charges, as they handle civil charges that don’t go through the same legal process as law enforcement agencies.
The high number of indictments and indictments in 2022 suggests that we could see sentences passed in 2023 for defendants who pleaded or were found guilty in these cases. It is important to note that the legal process can be complex and the outcome of an investigation may not always be immediately known. By staying informed on the latest developments in government investigations related to cryptocurrencies, we can gain a better understanding of the state of Web3 and the efforts being made to combat illicit activity in the space.
An upward trend
Data compiled by CertiK shows a significant increase in the number of cryptocurrency investigations conducted and publicly disclosed by US federal law enforcement and regulatory agencies from 2021 to 2022. Specifically, there was an 81% increase in the total number of investigations, with 53 public inquiries cases released in 2021 compared to 96 cases in 2022. This trend is important to note, as it suggests that efforts to combat illicit activity in the Web3 space are on the rise. This upward trend is likely to continue in the coming years given the increase in law enforcement and regulatory efforts in this area.
The rise in cryptocurrency investigations is significant for a number of reasons. A contributing factor is increased efforts and funding from law enforcement agencies to train and support cryptocurrency task forces. For example, the FBI launched its cryptocurrency task force in February 2022, and the number of disclosed cases doubled from 20 in 2021 to 40 in 2022. Similarly, the USSS launched a cryptocurrency awareness center in February 2022 and the number of disclosed cases also doubled from 9 in 2021 to 20 in 2022.
Characteristics of US federal law enforcement and regulatory agency investigations
To fully understand the scope of cryptocurrency cases in the United States, it is imperative to understand the roles and responsibilities of the various federal law enforcement and regulatory agencies. These agencies have different jurisdictions and capacities, and their investigations can be conducted in different ways. By gaining a deeper understanding of these factors, we can better understand the overall state of cryptocurrency investigations in the United States
Agency typology and jurisdiction
It is worth noting that, in addition to federal agencies, there are also state and local law enforcement agencies involved in cryptocurrency-related investigations.
In the United States, there are five major federal agencies responsible for investigating cryptocurrency crimes: the Federal Bureau of Investigation (FBI), the Commodities Futures Trading Commission (CFTC), the Internal Revenue Service Criminal Investigation Unit (IRS-CI) , the United States Secret Service (USSS) and the Securities and Exchange Commission (SEC). Each of these agencies has specific duties and responsibilities when it comes to cryptocurrency investigations, and the complex nature of government jurisdiction can make it difficult to fully understand the scope of these investigations.
Law Enforcement Agencies vs. Regulatory agencies
The FBI, USSS, and IRS-CI have criminal law enforcement capabilities and work closely with the DOJ’s Assistant Attorneys of the United States (AUSA) to prosecute and manage legal proceedings, including processing warrants and charges. These investigations can lead to criminal offences, such as imprisonment, kidnapping and other prosecutions.
On the other hand, the CFTC and SEC have regulatory and oversight responsibilities, rather than criminal law enforcement powers. They are responsible for enforcing the rules and regulations relating to the commodity and securities markets, respectively, and may take civil enforcement actions against individuals or companies that violate these rules. It is important to understand the differences between these agencies in order to properly evaluate cryptocurrency-related investigations. The distinction between departmental agencies with criminal law enforcement powers and regulatory agencies with oversight responsibilities can lead to significantly different prosecutions and managements. By understanding these differences, we can better understand the scope and nature of cryptocurrency investigations in the United States
Duration of investigations
Law enforcement and regulatory investigations can be lengthy and can take years before charges are brought forward. This means that it is possible that the investigations that come to light in one year refer to events that occurred in previous years. As a result, cryptocurrency charge announcements can be made for cases in 2022 through 2023 and beyond.
This characteristic of law enforcement investigations is exemplified in many cryptocurrency-related cases that have been announced in 2022. For example, on December 7, 2022, the United States Attorney’s Office of the Department of Justice for the Southern District of New York has announced the opening of an indictment indicting Rikesh Thapa with running a scheme to defraud a start-up tech company of more than $1 million worth of US currency, cryptocurrency and utility tokens. According to the allegations, Thapa carried out the scheme while serving as CTO of the company between December 2017 and September 2019.
Similarly, the conviction of Randall Crater, founder of My Big Coin Pay Inc., of defrauding investors through the marketing and sale of fraudulent virtual currency between 2014 and 2017 is another example of a case announced in 2022 but related to events several years earlier.
It is worth noting that these examples are not exhaustive and that there may be other cases that have not been publicly disclosed. As we move into 2023, it’s important to expect that we may see announcements of cases from 2022 and earlier, as the length of time since an event has occurred is not necessarily an indicator of whether or not an investigation or potential charges will be take place.
It is important to note that not all cases prosecuted by the federal government that result in a formal complaint, indictment, judgment or seizure are made public. Indictments may be sealed by courts or not formally announced via press releases, and investigators or prosecutors may choose not to publicly disclose certain cases for various reasons. This means that it can be difficult to fully understand the scope of cryptocurrency investigations in 2022, as we can only analyze cases that have been made public.
However, despite these limitations, there were many notable cases disclosed by US law enforcement and regulatory agencies in 2022 that are worth reviewing and reflecting on as we move forward into 2023. These cases provide invaluable insight into the state of cryptocurrency investigations in the United States and can help inform future developments in this area
Based on this analysis, it is clear that there has been an upward trend in the number of cryptocurrency investigations conducted and publicly disclosed by US federal law enforcement and regulatory agencies. As we move into 2023 and beyond, it’s important to stay informed about changes within government related to the Web3 space, as these changes will significantly impact the ecosystem and understanding of the cryptocurrency scope. Based on current trends, it is likely that inquiries will continue to increase in the coming years.
At CertiK, our goal is to protect the Web3 world through continued efforts to provide the highest level of security and due diligence in the space. Understanding these trends helps us better understand the need for more security in Web3. To stay up-to-date on relevant US crypto investigations, be sure to follow @CertiKAlert on Twitter for real-time alerts on a wide variety of hacks, scams, and law enforcement announcements.
Note: The information in this article is provided for informational purposes only and should not be construed as legal advice on any subject.
*This article is a press release. Original source here. *