In international news, local police in the Guandong province of China recently seized more than $1.5 million worth of cryptocurrencies, including bitcoin, ether and litecoin, as part of a raid against an illegal online gambling platform that utilized the currencies to hide the proceeds of its activities. In Greece late last week, a Greek court ruled to extradite Alexander Vinnik to France, where he stands accused of defrauding French citizens through the cryptocurrency exchange BTC-e. Mr. Vinnik also faces charges in his native Russia, and many speculate that his extradition to France may be only a layover en route to the U.S., where he has been indicted on 21 charges including identity theft, facilitating drug smuggling and over $4 billion in money laundering through bitcoin.

Domestically, the IRS has announced a new campaign to improve reporting compliance for cryptocurrency-related gains and losses. The two-pronged campaign consists of heightened review of previous filings coupled with public outreach to increase awareness of filing rules for cryptocurrency gains. The campaign begins with a "carrot" approach by offering safe harbor to individuals to correct erroneous filings without repercussion as the IRS publicly signals its intent to move to a less lenient enforcement scheme over time.

In a recently released report, cybersecurity firm Kaspersky Labs stated that over $10 million worth of ether has been stolen this past year via social engineering tactics, with investors interested in ICOs becoming the most popular targets. According to the report, scammers use phishing emails, fake websites and even Twitter to trick investors into sending funds to wallets that the scammers control. The report found that since the beginning of 2018, cybercriminals have triggered more than a hundred thousand security alerts from cryptocurrency-related schemes, including an increasing trend of "cryptojacking," in which attackers infect servers or computers with malware that surreptitiously siphons the machine's processing power for crypto mining.

For more information on recent cryptocurrency crimes and enforcement actions, please see:

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.