The cryptocurrency law firm of Nadrich & Cohen is actively representing those who have lost money due to bad behavior by cryptocurrency exchanges, such as misrepresenting financial strength and downplaying risk.
Small and large investors have lost digital assets worth billions of dollars in recent times. For example, Sam Bankman-Fried and his cryptocurrency exchange FTX have been the subject of worldwide headlines as they have spiraled into bankruptcy, as well as possibly criminal charges.
However, problems in the cryptocurrency and blockchain world extend far past FTX. Nadrich & Cohen is investigating how numerous platforms have exaggerated their companies’ financial strengths while hiding the risks associated with them from their investors. Investors might pay hefty prices if cryptocurrency exchanges misrepresented investments. These companies face intense scrutiny by regulatory agencies and cryptocurrency lawyers.
Call us now or text us from this page if you or a loved one lost money due to the bad behavior of a cryptocurrency exchange. A cryptocurrency lawyer at our firm will give you a free consultation and help you navigate through the legal world of cryptocurrency’s emerging technologies. We won’t charge you a fee until and unless we obtain compensation for your losses.
FTX is a cryptocurrency exchange which let customers engage in digital currency trades and transfers using blockchain technology. The exchange let customers exchange digital currency for conventional currency or different cryptocurrencies.
There are accusations that FTX embezzled the assets of customers, used customers’ assets illegally, and have run afoul of securities laws. FTX may have also violated tax law, as FTX currently owes money to the IRS as well as the Financial Crimes Enforcement Network. Bankman-Fried is facing charges of securities fraud, wire fraud, lying to his investors and more. Bankman-Fried has also reportedly been accused of running afoul of anti-money laundering laws.
Those who invested in FTX have suffered losses of billions of dollars. FTX’s collapse has created disruption and enormous concerns regarding other crypto exchanges and if those exchanges also lied to their customers.
Click here for more information about FTX lawsuits.
Genesis Trading And Gemini Earn
Gemini is a cryptocurrency exchange offering a product known as Gemini Earn. Gemini Earn let lenders provide loans for institutional partners. Gemini Earn, according to allegations, advertised that its investors could profit by earning interest on cryptocurrency they lent to others.
However, lawyers investigating Gemini allege that Genesis, a lending partner of Gemini’s, lacked financial soundness and was a lot riskier than they were represented as being.
Genesis filed for bankruptcy protection in January and has frozen every Gemini Earn account, leading to almost $1 billion worth of digital asset losses.
Genesis is facing legal issues because they are accused of misrepresenting facts about the strength of its finances and the risks associated with it, and wrongly freezing withdrawals from accounts. Gemini is accused of failing to protect customers in numerous ways, such as by not adequately auditing the condition of Genesis’ finances before making Genesis its partner in lending.
Click here for more information about Gemini Earn lawsuits.
Genesis Faces Legal, SEC Issues
The Commodity Futures Trading Commission, in June 2022, announced it was filing a complaint against Genesis, stating that Genesis made misleading or false statements to the commission, or omitted facts from the commission, in relation to self-certifying a product relating to bitcoin futures.
Gemini is now the subject of a class action lawsuit which alleges that the exchange sold accounts bearing interest without registering the accounts as securities.
BlockFi Faces Similar Allegations
Another crypto exchange, BlockFi, has also filed for bankruptcy. BlockFi employees warned about credit risks. However, BlockFi executives ignored these warnings, misrepresenting the risks associated with the exchange to customers. BlockFi, according to the Securities and Exchange Commission, violated security laws when they made misleading and false statements for over two years about the risk associated with its portfolio and its activities related to lending. While BlockFi blames its problems on the volatility of the crypto market, and on FTX, the exchange made an agreement to pay out $100 million worth of penalties due to the SEC charges, cease selling its lending product and cease its offers which are unregistered.
If you’ve lost cryptocurrency due to the negligence or fraud of BlockFi, click here for more information.
These exchanges mischaracterized their financial strengths and downplayed the risks of their portfolios. However, beyond that, they may have been little more than complex Ponzi schemes which stole billions from customers. Regardless, both small retail and large institutional investors have suffered losses in the range of tens of billions.
What Is Cryptocurrency?
Cryptocurrency entered the public consciousness in 2009 when Bitcoin was created. Crypto threatened to reduce the banking power of institutions and decentralize the entire financial system.
Since the introduction of Bitcoin, crypto’s market has seen exponential growth. Thousands of cryptocurrencies exist today. Some cryptocurrencies, like Bitcoin, are used in many types of financial transactions. Other cryptocurrencies’ applications are of the niche variety.
- Crypto is digital currency. No physical bill or coin exists.
- Go-between institutions like banks aren’t required for crypto transfers. It is received, sent and stored using digital wallets.
- Crypto isn’t backed by governments. It isn’t protected by governments, so it isn’t protected by things like deposit insurance.
- Crypto is sold and bought on currency exchanges such as Coinbase, Binance, Gemini and Kraken.
- Almost anyone can create cryptocurrencies.
What Nadrich & Cohen Is Doing
Nadrich & Cohen is performing investigations into possible arbitration claims and litigation against major cryptocurrency companies as well as individuals who promoted and ran the companies. If you have lost money regarding your cryptocurrency investment (cryptocurrency, crypto staking, crypto loan, crypto token, etc.), please call us today for a free, confidential consultation so we can learn about your circumstances and make a determination as to if we can accept your case.
Wrongful Crypto Account Freezes
One way that cryptocurrency owners commonly lose money is when their crypto accounts are wrongfully frozen.
These freezes happen for a variety of reasons, but it is always frustrating for account owners when they happen because the freezes prevent them from executing trades and liquidating their assets. Nadrich & Cohen is actively representing those who have suffered from cryptocurrency account freezes, helping them regain assets.
Cryptocurrency Scams And Volatility
While crypto is virtual money, devaluation of cryptocurrency and crypto fraud can absolutely result in the loss of real currency.
One of crypto’s defining aspects is extreme, sudden fluctuations in price. The value of a virtual coin can fluctuate drastically by the hour.
The price of Bitcoin fell by over 76 percent in 2018, then increased by over 15 percent in one day the following year. This led to $14 million worth of additional market value in a single day.
Later that year, the price of Bitcoin reached almost $14,000, only to crash down to $7,500 in a few months.
Fluctuations like these are normal. The value of Bitcoin was once $1,000 in 2017, but in December 2017 it was almost $20,000. Its value was then less than $8,000 just two months afterwards. A lot of people suspect that cryptocurrency prices are manipulated illegally by those who invest heavily in them.
Cryptocurrency is a popular target for fraudulent schemes intended to make a profit by taking advantage of investors. $9 million per day is lost to crypto scams. Common crypto scams include:
- Fraudulent wallets and exchanges: Hundreds of crypto exchanges exist. Fake exchanges, unfortunately, are quite common, as are fake wallets, which can be clones of legit wallets.
- Initial coin offering fraud: Initial coin offerings (ICOs) allow companies or individuals to raise funds for new cryptocurrencies by offering virtual coins in exchange for real currency. Those who commit fraud might tout ICO “investment opportunities” which are simply scams to steal digital wallets or coins.
- Phishing: Hackers attempt to obtain crypto investors’ personal information in order to steal their cryptocurrency, often using tactics such as fake Airdrops.
- Ponzi schemes: These schemes have been around since the 1920s, and are now seen in the cryptocurrency world.
- Impersonation: Fraudsters create fake accounts on social media sites which impersonate genuine cryptocurrency executives or businesses, and use these accounts to compromise or defraud others. Fraudsters might also pretend to be support staff for cryptocurrency exchanges.
- Pump And Dump Schemes: An old trick regarding the stock market is to drive the price of stock up, then sell off your holdings at an artificially-created peak. In the cryptocurrency world, this type of scheme is common at the stage of ICOs or later, whenever demand can be hyped up by false claims, allowing those holding the cryptocurrency to earn huge, phony profits.
SIM Card Hacks
A customer of T-Mobile lost $8.7 million worth of cryptocurrency when the company allowed a hacker access the customer’s account multiple times.
Prior to this occurring, the Federal Trade Commission warned about the possibility of fraud regarding cell phone service providers, a type of fraud known as SIM swap scams or SIM card swap hacks. Hackers are able to utilize multiple strategies to get past cell phone providers’ security systems and obtain new SIM cards possessing existing customers’ information.
Hackers use the information on the new SIM cards to obtain access to customers’ financial and personal accounts. This typically results in the hacker transferring all of the customers’ digital investments into their own accounts.
Cell phone providers who negligently fail to protect customers from crypto fraud need to be held responsible for their negligence.
Mishandling Of Cryptocurrency Funds
Parties involved in cryptocurrency transactions sometimes lose cryptocurrency. This has occurred in many high-profile instances, such as scandals involving Mt. Gox as well as individuals who were careless regarding computer equipment.
You may have entrusted cryptocurrency to a crypto exchange which lost it. You may have been involved with a transaction involving a loss of your cryptocurrency by an escrow agent. You are entitled to attempt to recover losses when you trust others to hold onto valuable assets.
However, blockchain ledgers work in unusual ways, and digital currency involves anonymity features which are built in. Because of this, it can be tough to prove that another person had custody of your funds. That being said, transaction evidence can still be discovered by investigating blockchain ledgers, investigating correspondence such as emails, and consulting with expert witnesses.
How Much Does A Cryptocurrency Attorney Cost?
Nadrich & Cohen is handling crypto cases on a contingency fee basis. This means that you will not be charged a fee if we don’t recover financial compensation for you.
You will only be charged a fee once we obtain a recovery for you, and that fee will simply be a percentage of the compensation we recover for you.
You will never owe us any upfront fee or any money out of your own pocket.
If you have suffered cryptocurrency losses due to the negligence or fraud of others, you may be eligible for financial compensation in a crypto lawsuit. Nadrich & Cohen is dedicated to helping those who have suffered losses due to cryptocurrency exchanges’ actions and are committed to making sure that you obtain the financial compensation you deserve.
Our experienced lawyers possess extensive knowledge regarding cryptocurrency laws and have successfully obtained financial compensation for clients in a wide variety of situations. We understand these complex cases and possess a commitment to utilizing our expertise in order to fight for your legal rights.
Whether you suffered losses due to fraud, misrepresentation, hacking, a security breach or another issue, we’re here to assist you. Our team of lawyers will tirelessly work to protect your rights and obtain for you the compensation you deserve.
Don’t hesitate to seek well-deserved justice. If you suffered a cryptocurrency-related loss, call us today for a free, confidential cryptocurrency lawsuit consultation. Our experienced lawyers have recovered over $350,000,000 for our clients since 1990. We are here to assist you and will fight to make sure your rights get protected through every step of the legal process.
We have decades of experience and are committed to helping those affected by crypto exchanges’ actions. We can provide you with the representation and legal support that you need in order to succeed.
Call us now to learn more regarding how we can assist you.