In a press release published this week, the U.S. Department of Justice (DOJ) announced that a California federal court authorized service of a John Doe summons on SFOX, a U.S. cryptocurrency prime dealer, earlier this week. According to the press release, the summons seeks information related to U.S. taxpayers who conducted at least $20,000 in cryptocurrency transactions through SFOX between 2016 and 2021. In a statement regarding the summons, IRS Commissioner Chuck Rettig urged taxpayers to "come into compliance with their filing and reporting responsibilities and avoid compromising themselves in schemes that may ultimately go badly for them."
In another recent press release, the Commodity Futures Trading Commission (CFTC) announced an enforcement action against an Ohio man, Rathnakishore Giri, and his companies in connection with an alleged cryptocurrency Ponzi scheme. The CFTC alleged that Giri fraudulently solicited more than $12 million in fiat and cryptocurrency from investors and misappropriated customer funds intended for digital asset trading. In a statement regarding the alleged scheme, CFTC Commissioner Kristin N. Johnson said, "Recent attraction to digital assets and cryptocurrency market firms proclaiming high yields or promising instant wealth, but obscuring deceptive schemes that borrow from long-prohibited behavior, is deeply concerning. While there are many benefits to responsible innovation, customers must remain vigilant."
In a third enforcement action this week, the U.S. Securities and Exchange Commission (SEC) announced charges against a blockchain startup, Dragonchain, its founder and two related entities in connection with the alleged sale of unregistered securities. According to the SEC, Dragonchain raised more than $16.5 million through the sale of its native token (DRGN), which the SEC characterized as "unregistered crypto asset securities." In its complaint filed this week, the SEC accused Dragonchain of failing to register DRGN as a security and creating "an information vacuum such that it could sell DRGNs into a market that possessed only the information Dragonchain chose to share about DRGNs."
For more information, please refer to the following links:
- Court Authorizes Service of John Doe Summons Seeking the Identities of U.S. Taxpayers Who Have Used Cryptocurrency
- CFTC Charges Ohio Man and His Companies with Fraudulently Solicitating Over $12 Million and Misappropriation in a Digital Asset Trading Scheme
- Statement of Commissioner Kristin N. Johnson Regarding the CFTC Charging Ohio Resident with Operating a $12 million Bitcoin Ponzi Scheme
- SEC Sues Three Entities and Their Founder for Unregistered Crypto Asset Securities Offerings
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