This week, the SEC obtained a court order shutting down a $30 million Ponzi scheme operating out of Florida through Argyle Coin LLC, a purported cryptocurrency business, and its principals, Jose Angel Aman and Harold and Jonathan Seigel. According to the SEC complaint, hundreds of U.S. and Canadian investors were tricked into investing in Argyle Coin under the false claim that its tokens were backed by diamonds. Instead, new investor money was used to pay fake returns to prior investors, and to pay for the individuals' own exorbitant personal expenses. In a similar action, authorities in Brazil shut down Indeal, another cryptocurrency Ponzi scheme, that defrauded 55,000 investors out of about $200 million. The company promised investors a 15% payout in the first month of investment. But as with Argyle (and any Ponzi scheme), new investors simply paid out old investors, with some additional funds going straight to the individuals behind the fraud.

Dutch authorities, together with Europol and authorities in Luxembourg, recently seized – a major "tumbler" (cryptocurrency mixing company that obscures a token's original source), after investigators determined that a large number of mixed coins were used for money laundering or illegal financing. The action is widely viewed as the first major case against a cryptocurrency tumbler/mixer. In another matter, Dutch police arrested former cryptocurrency entrepreneur Barry van Mourik for defrauding investors out of $25 million in a fake bitcoin mining operation. In China, two over-the-counter (OTC) cryptocurrency market makers were charged with illegally collecting $56 million worth of bitcoin from over 100 OTC traders as part of a massive loan scheme. The two money makers had spent the past two years building up their credibility through an OTC chat group. And in Australia, a government employee is facing charges that he used his position as an IT contractor to illegally siphon off processing power from the government's computer network in order to mine cryptocurrency.

The U.S. Commodity Futures Trading Commission (CFTC) has a new tactic to combat the upswing in cryptocurrency-related crime ‒ working with whistleblowers. The CFTC issued a statement telling the public they could receive both financial awards and certain protections if they report information that leads to the halt of fraud and manipulation related to virtual currencies. The U.S. Internal Revenue Service (IRS) also made a cryptocurrency-related statement, indicating in a letter to a U.S. Congressman that it is working on new tax guidance for cryptocurrency that will clarify issues such as calculating cost basis, acceptable methods of cost basis assignment and tax treatment of forks. This would be the first cryptocurrency guidance from the IRS since 2014.

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