Explaining prosecution outcomes for cryptocurrency-based financial crimes

Abstract

Purpose Cryptocurrencies have been used to commit various offences, but enforcement efforts remain underdeveloped relative to the value of these crimes. This paper aims to examine factors associated with outcomes of US-based cryptocurrency financial crime prosecutions. Design/methodology/approach The authors studied the 37 resolved cryptocurrency-based financial crime cases in the USA to date, exploring the impact of offence, defendant and evidence characteristics on the mode of disposition and penalties. The authors used bivariate analyses and logistic regression models to determine relationships among these variables. Findings The presence of individual defendants only (rather than a corporate defendant or combination thereof) and the use of only a cryptocurrency other than Bitcoin in committing a crime each made a case less likely to be resolved by dismissal, trial or summary or default judgement. Originality/value This paper is the first to examine variables contributing to financial crime prosecution outcomes and has implications for prosecutorial decision-making, resource allocation and the prevention and detection of financial offences involving cryptocurrencies.

Shaping the Metaverse into Reality: A Holistic Multidisciplinary Understanding of Opportunities, Challenges, and Avenues for Future Investigation

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The implications of national blockchain infrastructure for financial crime

“…The cryptocurrency market capitalisation is currently estimated to be three trillion US dollars (Mackenzie, 2022). Along with the societal benefits they have brought, cryptocurrencies have paved the way for the evolution of financial crime offences, due to their pseudo-anonymity, low cost, irrevocable movement of money and low barriers to entry (Durrant and Natarajan, 2019; Kethineni and Cao, 2020; Trozze et al , 2021). Initial coin offering (ICO) scams, Ponzi schemes, market manipulation, money laundering, sanctions violations, tax evasion, theft, malware and fraud are some of the offences that have been perpetrated using cryptocurrencies (Gandal et al , 2018; Kamps and Kleinberg, 2018; Reynolds and Irwin, 2017; Teichmann and Falker, 2021; Trozze et al , 2022).…”

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