WInvestors around the world are preparing for a hurricane of part-action charges, with a total $ 1.5tn in recent cryptocurrency losses. One big question is who, if anyone, is responsible – and who can be responsible?
With inflation and interest rates rising, the most popular cryptocurrencies have been hit hard and continue to fall: Bitcoin has lost more than 50% of its value this year; The largest rival, Ethereum, fell 65%; And the total value of crypto assets has dropped from a maximum of 3 3tn to $ 1tn from November 2021. U.S. federal regulators report that as of January 2021, 46,000 people have lost $ 1 billion in fraud.
Millions poured in to promote crypto – often with the help of celebrities – would have taken legal action in the aftermath of the disaster. Class-action charges are already pending. Kim Kardashian and boxer Floyd “Money” Mayweather Jr. have been charged with felony criminal mischief for promoting the cryptocurrency cryptocurrency EthereumMax.
The lawsuit alleges that he encouraged his followers to join the “EthereumMax community” and that the brand itself was a “pump-and-waste” scheme that deceived investors.
In a speech to the Economic Crimes Symposium, Charles Randell, head of the UK Financial Conduct Authority, said that a special symbol could not be “fraudulent” ግን But social media influencers are often paid and scammed by fraudsters. New signs on the back of pure guesses.
EthereumMax described the legal claim as a “misleading narrative.”
Kardashian and Mayweather were rarely chosen by celebrities. In October last year – at the height of the market, with Bitcoin trading at $ 1.14 tons, actor Matt Damon made his debut for Crypto.com, advising viewers that “wealth is good for the brave.” The announcement is seen as a turning point for crypto-financial investments backed by Hollywood A-Lester.
Other digital assets are also under investigation. Earlier this month, the Justice Department indicted Nathaniel Chastin, a former employee of the Justice Department NFT Marketplace OpenSeaNFT in connection with the planned trading of wire fraud and money laundering [non-fungible tokens] Assets.
“NFTs may be new, but this is not the case,” said US Attorney Demien Williams. He asserted that his confession had been obtained through torture and that his confession had been obtained through torture.
But in the crypto arena it is very difficult to prosecute fraud. There have been several allegations of theft, but accusations of digital fraud conflict with a central and unresolved question: Are cryptocurrencies guaranteed?
The United States Department of Homeland Security (SEC) v. WJ Howey Co. They decided in 1946 before the crypto age.
There are four pillars that support the financing of financial assets as a guarantee: (1) financial investment; (2) in a joint venture; (3) with profitability; And (4) that the benefit comes from the efforts of others.
If cryptocurrencies are safe, the SEC – the US regulator – has jurisdiction and fraudulently selling unregistered securities could be a felony, up to five years in prison. But the law is far from clear.
“Crypto is a strange bird – is it a coin or is it buying dollars or the right to invest one dollar?” Says Charles Elson, Corporate Management Officer. “Much of it is based on what the people represent, and any federal laws that violate these rules are violated.
The question of whether celebrities can be held accountable is open. First, the courts must determine if it is crypto security, and if this security is fraudulent.
“‘Oh, this is a simple investment, don’t worry?’ Did they say? Is it to attract investment? ” Says Elson. “There will be lawsuits and courts will not like fraud and they will often set up a way to punish the fraudster.”
But what if the local law is vague and these things are not safe? You can have the satisfaction of winning but you will not get any money. Where did the money go? Why do criminals use bitcoin and ransomware? Cannot be found.
Analysts point to the collapse of the crypto markets this week, with no cryptocurrency registered as secure. And the transactions or lenders you pass on are not supported by the Federal Reserve Insurance Corporation. (FDIC) Insurance guarantees.
US Financial Crimes Network (FinCEN) does not consider cryptocurrencies as a legal tender but treats currencies as money transfers.
SEC In a letter to 2019, Bitcoin decided that Hawai’i had failed Experiment, meet only “investment” requirements. A.D. In 2018, Gary Gensler, chairman of the Commodity Futures Trading Commission, said bitcoin’s biggest competitor, Ethereum, would pass the Hawaii test and that most crypto currencies should be registered with the agency as collateral. But there are efforts in Congress to write a bill for the cryptocurrency industry that could undermine the control of industry regulators.
Crypto currencies operate in a variety of commercial transactions, so any liability is complex, and most legal experts are prepared to argue that exchanges are not “safe ports.”
On Monday, crypto exchange Binance ‘Crypto’ lender Celsius Network stopped issuing Bitcoin for several hours after blocking, exchanging and transferring customers. Binance blamed “blockchain” for the ban.
The next day, the SEC began questioning whether crypto exchanges had adequate protections to protect domestic trade. The query is believed to include the most popular exchanges – Binance, Coinbase, FTX and Crypto.com, Kraken, Bitfinex and Crypto.com.
Finally, Elson says, the law on cryptocurrency and their exchange systems will be made public. “Did you tell people the truth about it? Is it based on fair trading or is it a fraudulent trading system?”
However, because cryptocurrency exchanges are not regulated by the SEC and it is very difficult to know who is on the other side of the trade, it is difficult to prove liability.
“The lesson is to not invest in an uncontrolled market,” Elson said.