Skadden Discusses First OFAC and FinCEN Parallel Enforcement Actions on Virtual Currency

On October 11, 2022, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and the Financial Crimes Enforcement Network (FinCEN) announced settlements for approximately $24 million and $29 million, respectively, with virtual currency exchange Bittrex, Inc. (Bittrex). The settlements represent the first parallel enforcement actions by FinCEN and OFAC in the virtual currency space and OFAC’s largest virtual currency enforcement action to date. The investigations by OFAC and FinCEN found that the company engaged in apparent violations of several sanctions programs and willful violations of the Bank Secrecy Act’s (BSA’s) anti-money laundering (AML) program and suspicious activity … Read more

Cryptocurrency Pump-and-Dump Schemes

Initial coin offerings (ICOs) have recently emerged as a popular method of financing blockchain-related startups. In an ICO, a startup creates and distributes its digital tokens, typically in exchange for Bitcoin, Ethereum, or fiat currencies such as U.S. dollars to raise capital to fund its operations. The startling growth of this market, coupled with rampant speculation and volatility, has both generated excitement and raised concern about potential exploitation or fraud.

In a new paper, we study “pump-and-dump” schemes (P&Ds) in the cryptocurrency market. P&D is a form of price manipulation that involves artificially inflating an asset price before selling … Read more