FBI’s Steven M. D’Antuono, the Chief of Financial Crimes Section within the Criminal Investigative Division, spoke to The Paypers, an online media portal focused on the global payment industry and community.
The focus of the interview was on ICOs and cryptocurrencies. Below you will find a summary of the interview.
- According to D’Antuono, the ways in which individuals conduct fraudulent ICOs vary. Overall, they can be divided into three different types of misinterpretation: the one connected to principals’ experience; industry’s interest in the ICO; and coin’s probable rate of return.
- Potential investors are advised to perform research on the entity and individuals offering the security and pay special focus to the location of the entity and under which laws they operate. Checks in relation to credentials of ICO promoters can be done using the Financial Industry Regulatory Authority’s (FINRA) BrokerCheck system.
- Besides working closely with the US Securities and Exchange Commission (SEC) and the US Commodity Futures Trading Commission (CFTC), the FBI staff has significant knowledge on the virtual currency and securities industry.
- When asked about money laundering schemes based on Bitcoin’s ATMs, D’Antuono reiterated the need for businesses to be registered with the Money Service Business with the Financial Crimes Enforcement Network (FinCEN). Failure to do so would be a direct violation of the 18 US Code Section 1960 – Prohibition of unlicensed money transmitting businesses.
- As far as STOs are concerned, the SEC is the responsible authority which determines whether an offering is defined as security or not. D’Antuono mentioned recent statements from the senior SEC officials which claim that the vast majority of ICOs should have been classified as a security. The FBI expects the trend of token offerings to increase in the future. “The more tokens there are, the more risk there is for fraud in the market,” adds D’Antuono.
- The general advice to investors is: get informed and do your research about a potential investment and associated risks. D’Antuono concludes the interview with a helpful message – “the best victim is no victim at all.”