The government has already ramped up its efforts in 2025 to tackle cryptocurrency fraud and associated money laundering schemes with several recent enforcement actions.

Cybercriminals exploit digital currency investment hopefuls. Their scams come in myriad forms such as ransomware attacks and virtual currency thefts, and the criminals use complex tactics to conceal their crimes to fuel their stolen profits.

As crypto scams and fraud surge, it is critical for whistleblowers to come forward with any information about crimes to help the relevant authorities, including, but not limited to the SEC, FinCEN, DOJ, and IRS with their enforcement efforts.

“Money laundering associated with crypto fraud is amongst the most prevalent of AML schemes, and whistleblowers bring them to us on a regular basis,” says Marlene Koury, partner at Constantine Cannon.

Although it has been reported that a Trump administration SEC will take a hands-off-crypto approach, the consequence will likely be that the use of crypto currencies will spike and resulting fraud will as well. It doesn’t necessarily follow that enforcement will drop for the fraudulent use of crypto. In fact, enforcement efforts could help bolster the legitimate use of crypto opening up new avenues for payments and competition in the market.

Aside from the SEC, the government has additional agencies in place to safeguard the financial system from illegal activity. FinCEN, a bureau of the U.S. Department of the Treasury, protects the nation’s financial system from illicit behavior, fights money laundering, combats terrorism financing, and investigates other illegal actions. It bolsters national security and works under the Currency and Financial Transactions Reporting Act of 1970, as amended by Title III of the USA PATRIOT Act of 2001, commonly known as the Bank Secrecy Act (“BSA”) – America’s first federal anti-money laundering and counter-terrorism financing (“AML/CFT”) statute.

The BSA requires banks and financial institutions to take measures against financial crimes including implementing adequate AML programs and filing “Suspicious Activity Reports” for transactions that exhibit unusual patterns, potential money laundering, fraud, terrorist financing, or other illicit activities that may indicate criminal behavior. The Secretary of the Treasury gives the Director of FinCEN “the authority to implement, administer, and enforce compliance with the BSA and associated regulations.”

Here are some recent developments in the news:

On January 15, 2025, the cryptocurrency exchange company, HDR Global Trading Ltd., a/k/a BitMEX, was sentenced to pay a $100 million fine for violating the BSA by willfully failing to establish and comply with an adequate anti-money laundering and know-your-customer (“KYC”) program in efforts to skirt laws and boost its revenue. BitMEX’s founders (Arthur Hayes, Benjamin Delo, and Samuel Reed) and its first employee-turned-Head of Business Development (Gregory Dwyer) entered guilty pleas for violating the BSA, and they were sentenced in 2022.

Also this month, the government announced that three Russian nationals were charged for their involvement in operating cryptocurrency mixing services Blender.io (from approximately 2018 to 2022) and Sinbad.io (until 2023). Cryptocurrency mixers allow their users for a fee to send cryptocurrency to recipients in a manner that conceals the source. It’s obviously a fan-favorite of criminals looking to conceal that their funds come from ill-gotten sources like cryptocurrency theft or ransom payments from data hacks. The defendants’ charges include counts of conspiracy to commit money laundering and counts of operating an unlicensed money transmitting business.

In May 2022, the Department of Treasury’s Office of Foreign Assets Control (OFAC) had sanctioned Blender.io, uncovering it was used by the Democratic People’s Republic of Korea (DPRK) to launder stolen virtual currency. OFAC also announced that Blender.io laundered funds for multiple ransomware groups. In November 2023, OFAC sanctioned Sinbad.io, citing its use by a DPRK state-sponsored hacking group and cybercriminals to obfuscate transactions linked to other criminal offenses.

In a different action, reported on by Constantine Cannon Whistleblower Insider, on January 6, the government announced that New York’s Yvette Wang was sentenced to 10 years in prison and will pay the forfeiture amount of $1.4 billion for conspiracy to commit wire fraud and conspiracy to commit money laundering. The fraud was connected to Wang’s role in managing intricate schemes with her associate, Miles Guo, and their business entities including a crypto scam.

In other news, Oklahoma’s Travis Ford, 35, pled guilty on January 10 for his role in a cryptocurrency investment fraud conspiracy as the CEO, co-founder, and head trader of Wolf Capital Crypto Trading LLC (Wolf Capital), a purported cryptocurrency investment firm that raised $9.4 million from about 2,800 investors. From January 2023 through August 2023, Ford sought investments through Wolf Capital’s website and internet promotion activities, making false promises to lure investors. He and his associates misused and diverted funds to benefit themselves with the Ponzi scheme.

And States Attorney Generals are focusing their energy on crypto scams as well.  New York Attorney General Letitia James announced an action to stop a text message crypto scam that affected and defrauded vulnerable New Yorkers. A network of scammers sent text messages claiming to offer remote work only to trick the recipients into depositing funds into cryptocurrency accounts. AG James froze $2.2 million worth of crypto and filed a lawsuit to recover the money. AG James asks the public to report knowledge of such fraud immediately.

If you have information about cryptocurrency scams, money laundering, or would like to learn what it means to be a whistleblower, please contact us. We will connect you with an experienced member of our whistleblower team.

Read More Cybercriminals Pay Steep Price for Running Crypto Scams and Laundering Cash at constantinecannon.com