The United States Department of Justice has announced that it has filed several charges in cases where they are alleging that the defendants have committed cryptocurrency-related fraud.
In United States v. Emerson Pires, Flavio Goncalves, and Joshua David Nicholas, United States v. Michael Alan Stollery, and United States v. David Saffron, the defendants are accused of operating crypto Ponzi schemes.
A Ponzi scheme is an investment structure where older investors make a profit from the money that is paid or otherwise brought in by newer investors. Ponzi schemes generally offer “little or no legitimate earnings” and use the money from new investors to stay afloat.
This round of charges is the latest example of how law enforcement is beginning to crack down on alleged fraudulent activity in the decentralized finance space. While federal law enforcement has been working to investigate and prosecute fraud, more local agencies are developing the capacity and expertise to investigate and pursue allegations of crypto fraud. While federal prosecutors are pursuing charges like conspiracy to commit wire fraud and money laundering, state agencies are more likely to pursue charges like theft by deception or deceptive business practices.