Genny Ngai and Will Roth Warn That Trump’s Cartel Focus Could Pose New Risks for Crypto Players
Morrison Cohen Partner Genny Ngai and Counsel Will Roth published an article in Cointelegraph entitled “Trump’s Focus on Cartels Highlights New Risks for Digital Assets.” In the article, they examine how Trump’s crackdown on cartels poses unforeseen risks for cryptocurrency software developers and investors.
The authors explain that since the Trump administration has designated several drug and violent cartels as terrorist organizations, calling for their “total elimination,” the DOJ has instructed federal prosecutors to pursue the most severe charges, including anti-terrorism laws, against these groups. This shift allows prosecutors to go beyond traditional drug and money-laundering offenses and apply anti-terrorism laws, like 18 U.S.C. § 2339B, which targets anyone providing material support or resources to designated cartels.
The crypto industry should be concerned because “material support or resources” includes any property or service of value, not just physical weapons, so anyone knowingly supporting a designated cartel could violate § 2339B. Given the government’s already aggressive stance against crypto, prosecutors could now target crypto platform developers and funders, as seen in the indictment of Tornado Cash developers for laundering over $1 billion in criminal proceeds. The authors also warn that the cartel designation will likely lead to more civil anti-terrorism lawsuits under the Anti-Terrorism Act.
The authors caution, “The digital asset community faces real risks here.” Violations of § 2339B carry up to 20 years in prison, with anti-terrorism statutes also having extraterritorial reach, meaning non-U.S. crypto companies are not immune to investigation.
“Now is not the time for the digital asset community to relax internal compliance measures,” they urge. They advise crypto companies to ensure that transactions with all designated terrorist organizations are identified and blocked, monitor for new terrorist designations and understand areas of new geographical risks.
Read the full article here.
Contacts
- Genny Ngai Partner
- gngai@morrisoncohen.com
- William Roth Counsel
- wroth@morrisoncohen.com
Related Practices
Our dynamic bench of business litigators defends corporations and individuals in complex, high-stakes matters in courts throughout the country.
Our business litigators possess the necessary skills to dissect complex financial instruments and agreements and present their analyses in clear, concise and persuasive terms.
Morrison Cohen handles a full range of securities matters, including complex, high-stakes securities litigations, in both federal and state trial and appellate courts, as well as before various arbitration and ADR forums, including FINRA and the AAA.
Our Digital Assets Group represents some of the largest and most significant names in the sector, drawing upon our depth of experience and comprehensive understanding of cryptocurrency, DeFi, DAOs and NFTs.
As one of the few mid-sized law firms with a dedicated government strategy presence, our Government Strategies & Controversies lawyers assist clients across a wide spectrum of industries in navigating the complexities of public policy, regulatory frameworks and government relations strategy.
Our White Collar and Regulatory Enforcement Practice represents corporate entities and individuals in investigations brought by a wide array of governmental agencies, as well as exchanges and self-regulatory organizations.
Related Sectors
We guide clients – from public and private companies using AI to those investing in technology – through the myriad legal, compliance and regulatory issues associated with generative AI applications.
Our Digital Assets Group represents some of the largest and most significant names in the sector, drawing upon our depth of experience and comprehensive understanding of cryptocurrency, DeFi, DAOs and NFTs.
Our multidisciplinary Financial Services & Fintech team approaches every matter as dealmakers, trusted advisors and problem solvers.
