Tales From The Crypto
The illinois Administrator has filed a complaint alleging that an attorney engaged in misconduct as a cryptocurrency trader
At all times related to this complaint, Respondent traded cryptocurrency, such as Bitcoin and Ethereum, and cryptocurrency futures and options, on cryptocurrency exchanges and applications such as Coinbase, BitMEX, and Kraken.
At all times related to this complaint, Respondent was not licensed or registered with any state or federal authority as an investment advisor or commodity pool operator.
During 2017, Respondent independently invested his own funds in cryptocurrency. In or about September 2017, Respondent began accepting funds from third parties (“investor victims”) who requested that he invest their funds on their behalf in various cryptocurrency products. Between about September 2017 and July 2019, Respondent accepted funds for investment in cryptocurrency products from approximately 21 investor-victims in amounts totaling approximately $139,500.
On November 8, 2023, the Acting United States Attorney for the Northern District of Illinois caused to be filed an information against Respondent in the United States District Court for the Northern District of Illinois, Eastern Division, in case number 2023-CR-592.
The information charged Respondent with the offense of wire fraud, in violation of Title 18, United States Code, Section 1343. Specifically, that Respondent knowingly caused to be transmitted by means of wire communication in interstate commerce, an internet transmission of an email to investor-victims that falsely described efforts he was making to return their funds, from Illinois through computer servers located outside of Illinois when, on or about September 23, 2022, he sent an email from Illinois to the investor-victims’ email accounts in which he knowingly made false statements that he had engaged an independent accounting firm to: 1) audit the funds the investor-victims had provided to him for investment in cryptocurrency products; 2) prepare a report of the investor-victims’ investments and distribute the report to them; and 3) assist Respondent in distributing funds to the investor-victims.
At the time Respondent sent the email to the investor-victims described…above, he knew the statements in his email were false because he had not retained the services of an independent accounting firm to audit the investments or prepare a report, and he had no money to distribute to the investor-victims because he had lost all of their money.
Repondent entered into a deferred prosecution agreement
Pursuant to the terms of the agreement, Respondent agreed, inter alia, to pay restitution totaling $124,500 to the individuals and in the amounts identified on the restitution schedule attached to the agreement. If Respondent successfully completes the diversion program and fulfills all the terms and conditions of the agreement, the government will move the court to dismiss the information against him.
(Mike Frisch)