Kim Kardashian and Floyd Mayweather among those being sued, but prosecuting fraud in the crypto arena is notoriously difficult
, with wire fraud and money laundering in connection with a scheme to trade NFT [non-fungible tokens] assets.
But prosecuting fraud in the crypto arena is notoriously difficult. A number of prosecutions have been brought for theft, but prosecuting digital fraud runs up against a central, unresolved question: are cryptocurrencies securities? If cryptocurrencies are a security, the SEC – the US’s top financial watchdog – has jurisdiction and selling unregistered securities fraudulently could be a felony, with up to five years in jail. But the law is far from clear.
The question of whether the celebrity pitch people could be held liable is an open one. First, the courts would have to decide if crypto is a security, and then if that security was promoted fraudulently.