This chapter delves into the specific laws and regulations in the United States governing cryptocurrencies, with a focus on their implications for forensic investigations.

1. Federal Laws and Regulations

  • Securities and Exchange Commission (SEC)
  • Securities Laws: Application of the “Howey Test” to determine if certain cryptocurrencies are securities.
  • Regulation of ICOs: Guidelines for Initial Coin Offerings, focusing on investor protection.
  • Relevant Laws: Securities Act of 1933 and Securities Exchange Act of 1934.

Commodity Futures Trading Commission (CFTC)

  • Commodities Regulation: Classification of cryptocurrencies as commodities.
  • Relevant Laws: Commodity Exchange Act.

Internal Revenue Service (IRS)

  • Taxation of Cryptocurrencies: Implementation of tax laws on cryptocurrencies as property.
  • Guidance: IRS Notice 2014-21 on virtual currency taxation.

Financial Crimes Enforcement Network (FinCEN)

  • AML and KYC Regulations: Application of the Bank Secrecy Act (BSA) to cryptocurrency transactions.
  • Registration Requirements: Mandatory registration of Money Services Businesses (MSBs) dealing in cryptocurrencies.

Other Federal Bodies

  • Federal Bureau of Investigation (FBI) and Department of Justice (DOJ): Enforcement of federal laws against cryptocurrency-related crimes (e.g., fraud, money laundering).

2. State Regulations

  • New York’s BitLicense: Pioneering regulatory framework for cryptocurrency businesses.
  • California and Wyoming: Progressive cryptocurrency legislation and initiatives.
  • Uniform Regulation of Virtual-Currency Businesses Act (URVCBA): An attempt to standardize state regulations.

3. Cryptocurrency and AML/KYC Compliance

  • Specific Laws: Application of the Bank Secrecy Act (BSA) and USA PATRIOT Act to cryptocurrencies.
  • Case Studies: Analysis of major cases involving cryptocurrency and money laundering.

4. Investigating Cryptocurrency Frauds and Scams

  • Relevant Federal Laws: Wire fraud statutes, the Computer Fraud and Abuse Act (CFAA), and others.
  • Case Examples: Ponzi schemes, ICO frauds, and other cryptocurrency scams.

5. Tax Evasion and Cryptocurrencies

  • Tax Laws: Analysis of cases where cryptocurrencies were used for tax evasion.
  • IRS Enforcement Actions: Techniques used by the IRS in tracing and prosecuting cryptocurrency-related tax evasion.

6. Cross-Border Issues in Cryptocurrency Investigations

  • International Cooperation: Overview of global regulatory efforts and intergovernmental cooperation.
  • Case Studies: Examples of cross-border cryptocurrency investigations.

7. Emerging Areas and Future Trends

  • Decentralized Finance (DeFi): Legal challenges and investigative approaches.
  • Non-Fungible Tokens (NFTs): Intellectual property issues and fraud concerns.


As digital currencies continue to evolve, so does the legal landscape surrounding them. This chapter provides a comprehensive overview, but the field is dynamic. Ongoing education and awareness of both federal and state laws are essential for any professional involved in cryptocurrency investigations.


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