Another individual extradited to the United States for crypto allegations.
On 17 August 2022, the U.S. Department of Justice, U.S. Attorney's Office, District of Oregon announced that an alleged cryptocurrency money launderer was extradited from the Netherlands to the United States ("US").
This follows an individual being extradited from Greece to the US for allegations of money laundering involving an illicit Bitcoin Exchange.
It is clear that the US is increasingly holding to account individuals outside the US that are involved with allegations of criminality involving crypto that have allegedly had an effect in the US
This can happen even if the individual has not stepped foot in the US.
In the right circumstances, prior to issuing an extradition request, a jurisdiction could also utilise INTERPOL and a Red Notice to locate an individual and seek their arrest for alleged crypto offences.
Background
The accompanying press release concerning this latest extradition states as follows: "According to the indictment, between at least August 2018 and August 2021, [the individual] and his co-conspirators are alleged to have knowingly and intentionally laundered the proceeds of ransomware attacks on individuals and organizations throughout the United States and abroad".
The release goes onto describe how the individual was arrested in Amsterdam pursuant to a provisional arrest warrant.
This is not the first time that an individual has been extradited to the U.S for allegations involving crypto.
On 5 August 2022, the US Department of Justice ("DoJ") announced the successful extradition of an individual from Greece to the US. The DoJ allege this individual to have operated BTC-e, a cryptocurrency exchange that allegedly laundered more than $4 billion of criminal proceeds.
As the DoJ Press Release at that time stated "Despite doing substantial business in the United States, the indictment alleges that BTC-e was not registered as a money service business [....] Had no anti-money laundering process [....] and no anti-money laundering program as required by federal law".
International dimension of offences involving crypto
As was discussed in a previous blog entitled "Can I be extradited for allegations involving crypto?", due to the borderless nature of crypto transactions, any allegation of criminality will inevitably involve multiple jurisdictions. As such, there may be numerous jurisdictions asserting jurisdiction and trying to extradite an alleged perpetrator to their jurisdiction to face justice.
The vast majority (if not all) of criminal allegations that underpin a crypto criminal investigation are of a financial crime nature, e.g. fraud, money laundering and insider dealing.
These offences, by their very nature, can take place across multiple jurisdictions and are therefore types of offences for which multiple countries can assert jurisdiction, including in relation to conduct outside their own country (hence extradition can be an option).
Indeed, due to the borderless nature of the effect of these crimes, a jurisdiction could assert jurisdiction against an individual who has not even stepped foot in that jurisdiction.
As such, jurisdictions might additionally utilise INTERPOL to locate an individual and seek their arrest prior to issuing any extradition request.
Asserting jurisdiction for cross-border allegations
It is generally accepted that the US's reach in these types of cases is far-extending. Indeed, so long as there is some aspect of the case which is alleged to have taken place in the US, there is the risk of criminal charges being brought in the US, and therefore extradition to the US. This could be applicable to other jurisdictions.
Indeed, the issue of extra-territorial reach and extradition for financial crime offences is an issue that the team have previously discussed in a separate blog entitled "Meng Wanzhou Huawei extradition and cross-border allegations".
Meanwhile, back in the UK
On 22 July 2022 the Crown Prosecution Service announced how four offenders were convicted on 21 July 2022 for fraudulently obtaining and laundering Bitcoin and other cryptocurreny worth tens of millions of pounds from an Australian-based cryptocurrency exchange.
Going forwards, in the UK we will certainly be seeing increasing charges brought by UK prosecuting authorities or regulatory agencies directly against those alleged to be involved in crooked schemes involving cryptoassets.
This will undoubtedly include the UK authorities and/or agencies being involved in more cases with an international dimension. In such a case, extradition could be a potential option. However, whether the UK has the same appetite as the US to pursue extradition in these types of cases, remains to be seen.
Indeed, the Gherson team have also previously argued that there is potentially an imbalance between the US and UK jurisdictional reach in relation to specific financial crime offences.
International crypto dimension – criminal investigations, litigation and extradition
Those who fear they may be subject to an extradition request from the UK, or who are just concerned about liability across multiple jurisdictions including the UK, should get in touch.
Gherson's criminal litigation, regulatory and investigatory team combine an expert knowledge of criminal and regulatory law underpinned with a firm understanding of digital assets and blockchain technology. As such, the team is able to provide expert strategic advice to anyone facing investigation in relation to any allegation of criminality involving cryptoassets. Working alongside the extradition team, Gherson's criminal litigation, investigations and regulatory team is able to provide an unparalleled service in any case with an international dimension. The team is also able to call upon lawyers in multiple other jurisdictions and build multi-jurisdictional teams to assist with any suitable defence.
INTERPOL, Red Notices and crypto
In addition, those who fear that a jurisdiction may have requested INTERPOL to process data relating to them involving any allegations of offences involving crypto, or are just concerned about potential liability, should get in contact.
Indeed, Gherson Solicitors continue to receive requests for expert advice and assistance from those who fear they may have outstanding financial issues arising. That advice tackles:
- How to best approach a possible INTERPOL red notice;
- Preparing for potential criminal proceedings / an extradition request;
- Preparing for a situation where a civil matter or commercial dispute could be used to initiate bogus criminal proceedings; and
- Even exploring the possibility of instigating civil litigation proceedings to recover any misappropriated assets.
Gherson have previously written a series of blogs designed to assist those who fear they might be subject to INTERPOL measures (including a Red Notice):
- INTERPOL and Red Notice Challenges
- How to Remove an INTERPOL Red Notice
- INTERPOL Red Notices and Extradition
- How do I know if I am subject to an INTERPOL Red Notice
Regulation and compliance
In these constantly changing times, firms that deal with cryptoassets, and additionally have exposure to firms that do, will need to carefully consider all their systems and controls to ensure that they are able to comply with all relevant AML and sanctions regulations.
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.