Explaining prosecution outcomes for cryptocurrency-based financial crimes

Abstract

Purpose

Cryptocurrencies have been used to commit various offences, but enforcement efforts remain underdeveloped relative to the value of these crimes. This paper aims to examine factors associated with outcomes of US-based cryptocurrency financial crime prosecutions.

Design/methodology/approach

The authors studied the 37 resolved cryptocurrency-based financial crime cases in the USA to date, exploring the impact of offence, defendant and evidence characteristics on the mode of disposition and penalties. The authors used bivariate analyses and logistic regression models to determine relationships among these variables.

Findings

The presence of individual defendants only (rather than a corporate defendant or combination thereof) and the use of only a cryptocurrency other than Bitcoin in committing a crime each made a case less likely to be resolved by dismissal, trial or summary or default judgement.

Originality/value

This paper is the first to examine variables contributing to financial crime prosecution outcomes and has implications for prosecutorial decision-making, resource allocation and the prevention and detection of financial offences involving cryptocurrencies.

Citation

Trozze, A., Davies, T. and Kleinberg, B. (2023), "Explaining prosecution outcomes for cryptocurrency-based financial crimes", Journal of Money Laundering Control, Vol. 26 No. 1, pp. 172-188. https://doi.org/10.1108/JMLC-10-2021-0119