Partner Richard Cannon comments on the rise of cryptocurrency fraud, investment scams and Ponzi Schemes in Law360.
Richard’s comments were published in Law360, 16 September 2022, and can be found here.
“Fraudsters have identified cryptocurrency as an excellent new environment for investment scams and Ponzi schemes.
The volatility of cryptocurrency, combined with eye-watering potential returns, makes it an attractive vehicle for fraudsters. Ponzi schemes thrive on volatility, and cryptocurrency’s normalisation of high returns on investments has allowed fraud to flourish in this new asset class.
The younger generation of investors who have readily approached cryptocurrency have come to expect high returns, something which scammers use to their advantage. Investment fraudsters and those operating Ponzi schemes are agile, and the largely unregulated cryptocurrency environment has created perfect conditions for them to thrive.
The ability to operate in unregulated environments just makes it easier for them. If regulatory controls increase on cryptocurrency in certain jurisdictions, what is to stop these scams operating from other jurisdictions with little or no control?”
04 Dec 2023