Mark Scott, a former equity partner at the law firm Locke Lord LLP, was convicted on Thursday of conspiracy to commit money laundering and bank fraud, reports FinanceFeeds.

He was one of the defendants in a lawsuit targeting individuals involved in the fraudulent cryptocurrency scheme OneCoin. Scott was suspected of laundering approximately $400 million in proceeds of OneCoin through fraudulent investment funds that he set up and operated for that purpose, writes FinanceFeeds’ Maria Nikolova.

Scott could face up to 20 years in prison on the charge of conspiracy to commit money laundering and up to 30 years for conspiracy to commit bank fraud.

Read the FinanceFeeds article.

Steptoe & Johnson LLP announced that the Blockchain Alliance, a public-private forum to combat criminal activity involving cryptocurrencies and blockchain technology, has grown to include 100 industry and government agencies in 19 countries.

Founded in October 2015 by the Chamber of Digital Commerce and Coin Center and led by Steptoe, the Alliance is comprised of a broad coalition of companies and government agencies that work to make the blockchain ecosystem more secure through education and dialogue between government and industry. In less than three years, the Alliance has grown from 17 industry members and six U.S. federal agencies to a total of 100 participants all over the world, including not only cryptocurrency and blockchain technology companies but also regulatory and enforcement agencies on six continents, as well as international entities including Interpol and Europol.

Steptoe partner Jason Weinstein (former deputy assistant attorney general in charge of cybercrime investigations at the Department of Justice and a member of the strategic advisory boards of BitFury, Coin Center and the Chamber of Digital Commerce) serves as the group’s director. Steptoe of counsel Alan Cohn (former assistant secretary for strategy at the Department of Homeland Security and a strategic advisor to several blockchain startups) serves as counsel to the Alliance.

“The growth of this Alliance – with 100 members around the world representing industry and government – is remarkable and reflects the growth of the cryptocurrency and blockchain space as a whole,” Cohn said. “Our mission is to enable industry and law enforcement to jointly protect public safety and help create an environment where innovation can thrive, and it’s working.”

“The Blockchain Alliance is an important organization that furthers vital communication between blockchain-oriented businesses and government agencies to help strengthen their understanding of enforcement objectives and cooperation,” said Amy Kim, chief policy officer of the Chamber of Digital Commerce. “The group’s work is critical in fostering the development of properly functioning markets involving virtual currency in particular and is much needed at a time when policy makers continue to have questions about this space. Its efforts have been instrumental in aiding law enforcement to detect crime and prosecute wrongdoers.”

The Blockchain Alliance serves as a resource for law enforcement and regulatory agencies to benefit from the expertise of some of the brightest minds in the blockchain industry for technical assistance in response to challenges faced during investigations. The Alliance also serves as a platform for open dialogue among law enforcement and regulatory agencies and the blockchain community about issues of concern to make blockchain technology more secure and to deter its use for unlawful purposes.

Additionally, the Alliance provides education and technical assistance regarding cryptocurrencies and other applications for blockchain technology, including through a series of webinars that have reached almost 700 participants in more than 35 countries.

“We are proud of the meteoric growth of the Alliance in just three years. The companies in the Alliance are good corporate citizens, and they deserve the credit for their commitment to working proactively with governments around the world to promote a secure blockchain ecosystem – for the benefit of government, industry, consumers, and the public,” Weinstein said.

Above the Law reports that a former partner at Locke Lord and founder/CEO of MSS International Consultants Ltd., a private equity fund headquartered in the British Virgin Islands, was arrested on a charge of conspiracy to commit money laundering.

According to the indictment, Mark S. Scott was part of a conspiracy to conceal the source of $400 million in process from an alleged pyramid scheme involving a purported cryptocurrency, OneCoin. Prosecutors allege he transferred money in and out of the country in order to hide the origins of the money, reports Above the Law editor Kathryn Rubino.

A judge set Scott’s bail at $1 million, secured by $200,000 cash, and placed Scott on home detention with an electronic monitoring device.

Read the Above the Law article.

State and federal authorities are picking up the pace of investigations into cryptocurrency markets, digital investment promotions and so-called initial coin offerings (ICOs) after being caught unprepared by the rapid adoption of cryptocurrency and blockchain technology behind digital currency transactions, according to a post on the website of Androvett Legal Media & Marketing.

“Until now, the explosive growth and soaring cryptocurrency valuations have occurred within a Wild West atmosphere of limited regulatory oversight,” said white collar defense attorney Douglas Richards of Denver-based Richards Carrington. “Regulators have taken notice and we’re starting to see a broad range of state and federal enforcement actions.”

State securities regulators in Texas, Colorado and other states recently took part in “Operation Cryptosweep,” a coordinated crackdown targeting fraudulent cryptocurrency operations that has resulted in the shuttering of certain investment websites and seizures of cryptocurrency and other assets. On the federal level, the Securities and Exchange Commission is examining whether certain cryptocurrency should be considered a commodity or an investment vehicle, which could trigger extra regulatory oversight.

“Blockchain technology and cryptocurrency are playing an important place in our modern economy, but parties raising funds through ICOs and individuals interested in cryptocurrency as an investment need to make sure they understand what they’re trading and do everything they can to protect themselves from fraud and regulatory scrutiny,” Richards said.

Earlier this month, tax attorneys Steven Toscher and Michel R. Stein, principals at Hochman Salkin Rettig Toscher & Perez P.C., delivered a presentation titled “New IRS Scrutiny on Cryptocurrency Reporting: Filing Requirements and Exchange Treatment.”

Toscher and Stein’s presentation explains, “Cryptocurrency is drawing increased attention from government regulators.” They note that in November 2017, Coinbase was ordered to release information on approximately 14,000 customers.

They also discuss the means of obtaining virtual currency, problems posed by “fair market value,” and issues that are unresolved.

Read the article.

Dallas-based AriseBank — intended to be the world’s first “decentralized bank” —  saw its initial offering of a cryptocurrency it called AriseCoin shut down before it could get off the ground, reports The Dallas Morning News.

The Securities and Exchange Commission has halted the sale of AriseCoin, saying it was all part of a more straightforward, old-fashioned investment scam, according to economy writer Jill Cowan.

“Attempting to conceal what we allege to be fraudulent securities offerings under the veneer of technological terms like ‘ICO’ or ‘cryptocurrency’ will not escape the commission’s oversight or its efforts to protect investors,” Shamoil T. Shipchandler, director of the SEC’s Fort Worth Regional Office, said in a statement.

The company company had said it raised $600 million ahead of its initial offering of the new currency.

Read the Dallas News article.

The recent Parity wallet “freeze” provides yet another example of a coding vulnerability in a smart contract (rather than a flaw in the underlying blockchain or cryptography) resulting in an exploit that compromises cryptocurrency worth millions, according to Proskauer Rose LLP’s Blockchain and the Law.

Wai Choy and Pengtao Teng write: “It again highlights some of the pitfalls of insecure code in the context of digital assets and raises questions regarding the extent to which software developers can be held liable to its users for losses suffered due to those oversights. As blockchain-related software that serve as storage vaults for digital assets continue to proliferate, it will be interesting to see how industry standards and the existing software liability regime in the U.S. and other jurisdictions evolve to reflect the critical role of secure software in the ‘Internet of Value.'”

Read the article.