As cryptocurrency has become a ubiquitous part of modern finance, so too has it become the latest tool for criminals. While this new currency may seem disorienting to newcomers who are still grappling with the underlying technology, the crimes surrounding cryptocurrency are as basic as they come. Most fraudulent cryptocurrency schemes bear a striking resemblance to conventional frauds with which society is all too familiar, from Ponzi schemes, to investment scams, to basic theft. Where we used to see bank robberies, now we see hacking of crypto wallets and exchanges. In 2021 alone, crypto fraudsters absconded with over $14 billion worth of cryptocurrency, up from $7.8 billion in 2020. See MacKenzie Sigalos, Crypto scammers took a record $14 billion in 2021, CNBC.com (Jan. 6, 2022). But as described by Newton's Third Law of Motion, for every action, there is an equal and opposite reaction. Law enforcement has responded to the rising incidence of fraud by increasing resources to prosecute cryptocurrency scams, and regulators are similarly focused on imposing regulations to curb the fraud and protect investors. While investigating and prosecuting such crime presents obstacles as the law and enforcement technology races to catch up, novel technologies are increasingly allowing investigators to overcome the pseudonymous nature of cryptocurrency.

Modern Cryptocurrency Frauds Take Several Forms, but Frequently Resemble Conventional Frauds. Cryptocurrency frauds often differ little from conventional frauds, aside from the type of assets involved. Some cryptocurrency fraudsters operate what are essentially classic Ponzi schemes. For example, in February 2022, the founder of cryptocurrency platform BitConnect was indicted for allegedly operating a "global Ponzi scheme" where early BitConnect investors were paid "with money from later investors." See BitConnect Founder Indicted in Global $2.4 Billion Cryptocurrency Scheme, DOJ (Feb. 25, 2022). Similarly, QuadrigaCX, a Canadian cryptocurrency exchange, collapsed due to a massive fraud perpetrated by the now deceased CEO. See AquadrigaCX, A Review by Staff of the Ontario Securities Commission. The Ontario Securities Commission found that the exchange was essentially a Ponzi scheme and called it "an old-fashioned fraud wrapped in modern technology." Id.