Block on Trump's Asylum Ban Upheld by Supreme Court
Cryptocurrency can certainly be cryptic. It has its own lingo and set of concepts, and many who operate in the space do so with the anonymity of their meme profile pics and pseudonyms.
The legal nature of crypto is also cryptic. Does it fit into our existing financial regulation frameworks? Or is it something new entirely? What does that mean for those who take advantage of the murkiness at the expense of others? As crypto has become more mainstream, lawsuits and administrative proceedings are picking up and wrestling with these questions.
Since 2013, hundreds of lawsuits have been filed relating to cryptocurrencies. Some are filed with regulatory agencies, including the Securities and Exchange Commission or the Commodity Futures Trading Commission.
Others are enforcement actions by the Department of Justice involving criminal law. In February, DOJ charged a couple with conspiracy to commit money laundering of billions of dollars in bitcoin allegedly stolen from a virtual currency exchange.
Some are private class-action lawsuits, where a group of people similarly harmed by a product or actor band together to sue. In May, after a supposedly more stable cryptocurrency called GYEN tanked, investors sued the sellers of the cryptocurrency.
Many of the issues in this space relate to one basic legal concept: fraud. Fraud is when one person or entity lies or deceives another, through outright lies or by misrepresenting or hiding the truth, and causes the second person to lose something of value.
A lawsuit involving fraudulent activity relating to crypto investing could involve a variety of different laws, depending on what kind of activity was involved and where it happened.
One of the more cryptic elements for cryptocurrency in the law is whether different cryptocurrency products are considered securities under the law. A security is a type of financial instrument that comes with its own set of laws and is closely regulated. If a cryptocurrency product is a security, securities law comes into play. But if it's not a security, then other areas of law that get at fraudulent behavior have to fill in the blanks. But this area, as applied to crypto products, is murky and in flux.
The crypto space is the Wild West of the new millennium. Bad actors are out there, but laws specific to this space have not yet caught up to regulate activity. Until that happens, crypto investors may be wise to tread lightly and be scrupulous with their investments.
Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.