Cryptocurrency is alleged to play on the volatility in the value of crypto assets many of which exploit the public’s lack of familiarity with crypto assets.
In basic terms, a cryptocurrency is a digital token which can be used to purchase goods or services. In more complex terms, most cryptocurrency systems give the coin holder a digital ‘key’ which allows for a change in record to be made on a ledger known as a ‘blockchain’. Bitcoin is the most famous cryptocurrency but there are many others, such as Ethereum and Litecoin.
Cryptocurrencies are often ‘decentralised’ meaning that they do not require the infrastructure of a central bank or government. For some, this is attractive, as it frees the currency from the politics of a single jurisdiction and allows for anonymous transactions.
Cryptocurrencies occupy an unusual space in English law. Since cryptocurrencies are decentralised and tokenised via a key, it is not clear that anyone ‘owns’ the coin. English law holds property in two categories:
For example, ‘a bitcoin’ expressed as a token, one can use as a currency, is different to a title for a piece of land. Bitcoin is not in possession. It remains within the blockchain. A bitcoin is not in action- it does not embody any enforceable right on another party.
The question of whether a Bitcoin is property was decided, temporarily, by the injunction granted in AA v Persons Unknown in the High Court. Mindful that Bitcoin is widely viewed by its users as equivalent to a ‘fiat’ currency, the court took a pragmatic approach and declared Bitcoin as a property. However, as the decision was only made in the grant of an injunction, the question over Bitcoin’s category falls short of completely settled.
Criminal offences related to bitcoin theft may be affected by the caselaw as it develops.
Volatility – The rapid increase in cryptocurrency value attracts a wide variety of investors. Many of these are retail investors chasing returns exceeding the anaemic interest rates of their savings accounts. During the COVID pandemic and flush with cash from government stimulus schemes, these investors were keen to join the gold rush. The small sums at risk appeared to be worth the lucrative rewards as the cryptocurrencies soared in value.
Other investors viewed cryptocurrencies as the new dawn of individual rights, free of the financial regulation of the state. As well as financial return, these investors hoped the currencies would succeed for ideological reasons.
Decentralised currency– Anonymity when transacting is both the draw and the drawback of cryptocurrency. Those who appreciate the anonymity do so because transactions cannot be traced to an individual with any ease, affording the individual the freedom to purchase what they want without being watched.
However, this expectation of anonymity in transactions can bleed into crypto fraud. As cryptocurrencies do not benefit from a unified financial regulator, users can grow accustomed to dealing with anonymous online figures in a way that causes alarm in a regulated market.
Fake coin / rug pull – The release of a new coin, usually with the promise that it will rapidly increase in value after release and that the mark should purchase early for quick return. These are often called an ‘Initial Coin Offering’. Sometimes the coin will never be released and the scheme merely evaporate (known as a ‘rug-pull’). Occasionally the coin is released but is not as described. Otherwise, the coin is released but fails to achieve the heights of value promised to initial investors.
Wallet hack – A theft of the ‘key’ held in the crypto wallet. This can be achieved by phishing or other similar methods.
Misrepresentation of crypto value – Exaggerating the coin’s potential use or stating that returns are imminent. Once the mark has driven up the price of the coin, initial investors may sell the coin at volume in a ‘pump-and-dump’ approach.
Investment schemes – Promising great opportunities for guaranteed money, these crypto investment schemes encourage investors to part with their cash without having them engage with crypto assets at all. This fraud is simply a reframing of a common fraud by false representation.
Fake exchange scam – Many retail crypto investors use an exchange to purchase and sell cryptocurrencies. Well-known exchanges such as Coinbase contrast with shadier exchanges, some of which only serve to steal private information from users.
ABV Solicitors has the expertise you require to mount a strong defence to cryptocurrency offence allegations.
If you are arrested for this offence, you will be taken to a police station for the purpose of being interviewed under caution. Among other rights you have the right to be represented at this interview by a solicitor free of charge. This is usually a duty solicitor nominated by the police. You also have however the right to nominate a solicitor of your choice. The solicitor will be able to obtain some information from the investigators about why you have been arrested and will be able to discuss this with you and provide you with advice prior to the interview.
ABV Solicitors have expert cryptocurrency fraud solicitors able to attend the police station on short notice nationwide.
Upon receipt of such a letter it is critical that you seek the assistance of a solicitor immediately. ABV Solicitors will allocate a specialist cryptocurrency fraud solicitor for you and make arrangements on your behalf to liaise with the investigators and facilitate an interview at your convenience.
This will allow sufficient time for you to arrange a face-to-face meeting with a specialist solicitor in advance of any interview so you can be advised, and fully prepared on what to expect.
We are here to fully support you and those concerned during this difficult time. Obtaining immediate legal advice can make all the difference to the outcome of the investigation.
This can be an extremely stressful time for you, your family and your business.
You may have already been interviewed and released on bail or released under investigation. You may have not used a solicitor at all during your interview or are not confident with the solicitor who represented you and require a specialist solicitor with experience in this area.
Whatever the situation, ABV Solicitors have a dedicated team of experts who are experienced in this field and who can provide you with sound advice and assistance.
If you have been charged with cryptocurrency fraud you must seek the assistance of a defence specialist immediately. ABV Solicitors have a dedicated Fraud and Financial Crime department consisting of experienced solicitors who are specialist in this field.
ABV Solicitors can provide immediate advice and assistance and assist you and your business during this stressful time.
Law enforcement agencies such as the police, HMRC, FCA or SFO often use ancillary powers in addition to making arrests and search warrants. These include applying for Restraint Orders or Account Freezing Orders under the Proceeds of Crime Act 2002.
The purpose of this is to prevent those under suspicion to dissipate assets which may have been acquired through the commission of committing offences.
These Orders are draconian and can cause severe disruption to the lives of individuals and those connected to them including their businesses.
ABV Solicitors have a dedicated team of experts within their Fraud and Financial Crime Department who specialise in tackling these Orders.
If any of the above circumstances apply to you or someone you know contact ABV Solicitors Fraud and Financial Crime Department immediately on 0344 587 9996 or visit our website at www.abvsolicitors.co.uk
ABV Solicitors are available 24/7 and offer their professional expertise and assistance nationwide.
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