Cryptocurrency Losses: Investment Scam or Bad Business Decision?

 Posted on November 12, 2024 in Fraud

Cryptocurrency fraud can lead to serious federal charges. While cryptocurrency is largely unregulated and untraceable - which is a feature, not a bug - using it to defraud others is still a crime. It can be difficult for federal law enforcement to tell the difference between someone who is running a legitimate cryptocurrency investment scheme and someone who is running an investment scam. Asking people to send you money to invest for them is always a risky plan. Even if you are legitimately trying to help people make money, losing investment funds in cryptocurrency can make it appear that you are simply scamming people and keeping their money. If you are charged with cryptocurrency fraud, you need a dedicated Dallas, TX white-collar crimes attorney to help you.

Why is Cryptocurrency Investment Often Mistaken For a Scam?

If you were investing in cryptocurrency on others’ behalf, losing the money can rapidly lead to you getting accused of defrauding your investors. Part of the problem has to do with the nature of cryptocurrency. You may not have access to clear records showing where the money went like you would in traditional investing. There is also the fact that cryptocurrency is often used in all types of criminal activity to the point where dealing in at all might be considered suspicious.

Factors That Suggest an Investment Scam 

You might be more likely to be accused of fraud if: 

• You did not know your investors personally - If you were investing on behalf of friends or family members, it may appear more likely that you were trying to help your investors, not trick them out of money. If you were investing on behalf of people you have no personal relationship with, especially if you were contacting random individuals online to offer to invest in cryptocurrency for them, it may look like you were running an investment scam. 
• None of your investors ever made a profit - If you have a history of success investing in cryptocurrency and several people you have invested on behalf of have made a profit, it might appear that you are guilty of nothing but making a poor business decision. 
• You have done nothing to legitimize your investments - If you have opened a corporation, reported any profits on your tax returns, or taken other actions to legitimize your investing, you might be less likely to come under suspicion. 
• You were illegally managing other people’s money - If you did anything you are required to have a license or power of attorney to do and do not have the right license or legal paperwork, you might be charged with a separate crime. 

Contact a Dallas County, TX Cryptocurrency Fraud Lawyer 

If you are facing federal charges after investing in cryptocurrency with other people’s money, Spencer & Associates will fight for you. Skilled Dallas, TX investment scam attorney Arnold Spencer will do all he can to help you avoid a serious conviction. Contact us at 214-385-8500 for a complimentary consultation.