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Cryptocurrency Crimes
Last Updated on: 1st June 2025, 03:45 am
Listen up – if you’re reading this, you’re probably scared shitless about cryptocurrency charges. The brutal truth: the feds have gotten really good at tracking crypto, and they’re putting people away for decades. I’m not here to sugarcoat this. You’re facing serious federal time, and the government knows exactly what they’re doing. Let me break down what you’re really up against,because most criminal defense lawyers don’t understand crypto – and that ignorance will land you in federal lockup. The blockchain creates a permanent record of every transaction you’ve ever made. Every. Single. One. That Bitcoin you thought was anonymous? It’s not. The feds use companies like Chainalysis, TRM Labs, and Elliptic to trace your transactions from wallet to wallet. They can see when you bought it, where you sent it, who received it. They can track coins through multiple hops, through exchanges, through mixers. What nobody tells you – they’ve been building these cases for years, watching your wallets, waiting for you to make a mistake. The blockchain never forgets,and neither does the Department of Justice.
Back in 2013, when Ross Ulbricht ran Silk Road, the feds were stumbling around in the dark.
They got lucky with him – found his laptop open, grabbed it before he could encrypt everything. He got life without parole. Think about that. Life. No parole. For running a website. But that case taught the feds everything they needed to know about cryptocurrency investigations. Now they have entire divisions dedicated to blockchain analysis. The IRS Criminal Investigation Division has crypto specialists. The FBI has a dedicated crypto unit. The Secret Service investigates crypto crimes. Even small local police departments are getting blockchain analysis tools. What started as one lucky bust has turned into a sophisticated machine that’s convicting people left and right. The government learned fast, and they learned well. Each case builds on the last one, each conviction teaches them new tricks. Your case won’t be their first rodeo – it’ll be their thousandth. The IRS Criminal Investigation Division is the most dangerous agency you’ll face in a crypto case. Why? Because every crypto crime becomes a tax crime. If you didn’t report your crypto on Form 8949, if you didn’t pay capital gains, if you checked “no” on the crypto question on your 1040 – congratulations, you just committed tax fraud.
Criminal tax evasion means up to 5 years per count.
Filing a false return? That’s 3 years per return. Failure to file? Another year per return. These penalties stack. I’ve seen clients facing 20+ years just on tax violations alone, before we even get to the money laundering, wire fraud, or whatever else they’re throwing at you.The IRS-CI has a 90% conviction rate. Ninety percent. According to the IRS Criminal Investigation Annual Report, they’re not messing around. If you operated any kind of crypto exchange, peer-to-peer trading, or even just sold Bitcoin to friends – you might have violated money transmitter laws. People get completely fucked by this. FinCEN requires registration as a money services business if you’re exchanging crypto for cash. But it’s not just federal – each state has its own requirements. New York wants a BitLicense. California wants a money transmitter license. Operating without these licenses is a federal crime under 18 U.S.C. § 1960. We’re talking 5 years in the penitentiary, and that’s before they add the conspiracy counts, the money laundering counts, the wire fraud counts.
I had a client who thought he was just helping people buy Bitcoin. He’s doing 8 years right now.
FinCEN’s MSB registration page spells out requirements most people never knew existed. The complexity is staggering – federal requirements, state requirements,sometimes city requirements. Miss one? That’s a felony. Miss two? Now it’s a pattern. The government loves patterns because patterns mean intent, and intent means longer sentences. Wire fraud is the prosecutor’s Swiss Army knife in crypto cases. Every crypto transaction touches the internet, which means it crosses state lines, which means it’s wire fraud if there’s any deception involved. Did you lie about what the crypto was for? Wire fraud. Did you promise returns you couldn’t deliver? Wire fraud. Did you run a Ponzi scheme with Bitcoin? Wire fraud. The statute allows 20 years per count, and they charge each transaction as a separate count. I’ve seen indictments with 50+ counts of wire fraud. Do the math – that’s 1,000 years of potential time. The kicker: wire fraud has a 5-year statute of limitations, but it starts from the last fraudulent act. If your scheme ran for years, they can reach back and charge everything. The federal wire fraud statute,18 U.S.C. § 1343, is broader than most people realize.
Using mixing services like Tornado Cash? You just painted a massive target on your back. The Treasury Department sanctioned Tornado Cash in 2022, making it illegal for any U.S. person to use it. But even before the sanctions, using mixers could support money laundering accusations. The government argues that the only reason to use a mixer is to hide criminal activity. That’s not always true – maybe you wanted privacy, maybe you were hiding assets from an ex-spouse, maybe you just didn’t want people knowing your business. Doesn’t matter to them. They’ll hit you with money laundering conspiracy, and that’s 20 years. The developer of Tornado Cash? He’s facing criminal prosecution just for writing the code. The Treasury’s sanctions announcement changed the game entirely. If you used Tornado Cash after August 8, 2022, you committed a federal crime. They don’t care about your reasons. They don’t care about privacy rights.They care about convictions, and mixing services hand them those convictions on a silver platter. NFTs opened up a whole new world of fraud prosecutions. That jpeg of a monkey? It might be a security. If you promised buyers that the NFT would increase in value, if you talked about “returns” or “profits,” if you built a community around price appreciation – congratulations, you might have sold unregistered securities.
The SEC is going after NFT projects hard.
Not just the SEC – the DOJ is bringing criminal cases. Pump and dump schemes with NFTs have the same penalties as traditional securities fraud: up to 20 years behind bars. Celebrity endorsements? They’re getting prosecuted too. Kim Kardashian paid $1.26 million to settle SEC charges for promoting EthereumMax. But that was civil – criminal prosecutions are coming for others. If you launched an NFT project and made any promises about value, the SEC’s enforcement actions show they’re watching.
International complications make crypto cases a nightmare. Your coins don’t respect borders, but the law does. If you’re a U.S. citizen, you’re subject to U.S. law no matter where you are. Hiding in Dubai? The U.S. has an extradition treaty with the UAE. Portugal? Extradition treaty. Even countries without treaties will sometimes hand you over – just ask Do Kwon. What’s really fucked: multiple countries can prosecute you for the same crypto activity. The U.S. hits you with wire fraud, the UK hits you with money laundering, Singapore hits you with securities violations. You could face prosecution in three different countries for one scheme. Asset seizure gets even messier. The feds can grab your crypto even if it’s on a foreign exchange. They’ll subpoena Binance, Coinbase, Kraken – and these exchanges comply. Your coins get frozen, then seized, then forfeited. The DOJ’s Money Laundering and Asset Recovery Section has entire teams dedicated to international crypto seizures. They coordinate with foreign governments, they trace funds across borders, they freeze accounts you didn’t even know they knew about. One day your crypto is there,the next day it’s property of the United States government. No trial, no conviction, just civil forfeiture because they claim the assets are proceeds of crime.
So how do we defend these cases?
First, we attack the blockchain evidence. They need to prove that you controlled those wallet addresses. Just because coins went to an address doesn’t mean you controlled it. We challenge every link in their chain of evidence. How do they know you had the private keys? Can they prove you authorized the transactions? Blockchain analysis is complex, and they often overstate their conclusions. We bring in our own experts to poke holes in their analysis. Second, we raise Fourth Amendment challenges. Did they get a warrant for your exchange records? Did they seize your devices legally? Did they compel you to provide passwords in violation of the Fifth Amendment?These constitutional challenges can gut the government’s case. Third, we negotiate. Most crypto cases end in plea deals, but the terms matter enormously. The difference between pleading to money laundering versus tax evasion can be 15 years of incarceration. We know which counts to fight and which to negotiate. Sometimes we can get the crypto charges dropped entirely in exchange for pleading to a lesser offense. Sometimes we can argue for a downward departure based on the novel nature of cryptocurrency law. Every case is different, every negotiation is unique, but having a lawyer who understands both the technology and the federal sentencing guidelines is crucial.
I’m not going to sugarcoat this. If you’re facing federal crypto charges, you’re in serious trouble. The conviction rates are high, the sentences are long, and they’re getting better at these cases every day. What pisses me off – most criminal defense lawyers don’t understand cryptocurrency. They don’t know the difference between Bitcoin and Ethereum. They can’t read blockchain explorers. They don’t understand DeFi, smart contracts, or cross-chain bridges. Their ignorance will cost you decades of your life. You need a lawyer who lives and breathes this stuff, who understands both the technology and the law. Because they sure as hell do. They’ve been trained by Chainalysis,they have experts on staff, they know exactly how to trace your transactions and build their case. If your lawyer can’t match their expertise, you’re fucked. My advice: assume everything you did on blockchain is public. Assume the feds know about every transaction. Assume they’ve been watching for years. Because they probably have. The blockchain is forever, and so are federal convictions.
If you’re under investigation, if you’ve been contacted by federal agents, if you even think you might be on their radar – you need to act now.
Don’t wait for the indictment. Don’t think you can explain your way out of it. For the love of God, don’t try to move your coins around to hide them. They’re watching those wallets, and you’ll just add obstruction of justice charges. Get a lawyer who understands crypto, who’s handled these cases, who knows the government attorneys and the game they’re playing. This isn’t just about your money anymore – it’s about your freedom. The Spodek Law Group has defended cryptocurrency cases nationwide. We’ve seen everything – from small-time traders caught up in tax issues to major exchange operators facing decades in confinement. We understand the technology, we understand the law, and we understand what you’re facing. Don’t trust your freedom to a lawyer who’s learning about blockchain from YouTube videos. Your life is on the line.