Bitcoin Criminal Defense

Confusion often shrouds prosecutions linked to virtual currency. To prove that a Bitcoin-related crime has taken place, the state or federal government often needs to prove that a transaction has occurred, and that you were somehow involved in the transaction. Digital currency systems were designed to make those two things difficult to prove. Fighting the prosecution’s efforts to prove the elements of a crime requires a lawyer who understands both the legal and the technical features of virtual currency. California Bitcoin lawyer Roger E. Naghash represents defendants throughout the United States from his office in Orange County. He will listen to the details of your situation and tailor a strategy to them.

The purchase or sale of controlled substances or weapons often involves secrecy. For this reason, Bitcoin can sometimes be a preferred method of payment because it was designed with anonymity in mind, and this feature can inject confusion into a criminal case. The prosecution will need to prove that you were either buying or selling the illegal items. This usually means showing that the drugs or weapons were going to be transferred, and that payment was going to occur. Tracing transactions in Bitcoin’s block chain ledger can seem straightforward, but it can be hard to prove who owns an account. It is also hard to show that the virtual currency in that account was actually involved in a crime.

Under California law, money laundering occurs when crime-related money is moved or invested. Even if concealment was not the goal in moving the funds, transferring money that was involved in crimes can still be regarded as money laundering. Because of Bitcoin’s anonymity and ability to travel great distances, it can be an ideal medium for money laundering operations. There is some history of digital currency being used for this criminal purpose, so a prosecutor or investigator might be overly suspicious and might not believe that large transactions in it can occur for legitimate purposes.

Theft by fraud is basically defined as an unlawful taking of someone else’s property by fraudulent means. California law gives several examples of this offense. It can include buying or selling stolen credit card information, identity theft, stealing or receiving a stolen, forged, or altered check, or deceptive business practices. Usually this type of fraud is perpetrated in an effort to get money, so Bitcoin’s methods of payment can become woven into a fraud case. This is because a virtual currency’s anonymity features are very attractive to people who wish to commit fraud while hiding their true identities.

In 2014, the IRS declared that Bitcoin is an asset. Therefore, the receipt of virtual funds as payment is often deemed taxable income. Also, a gain in the value of a digital currency as an investment device can be subject to taxation as a capital gain. Failure to pay these taxes can be a serious offense.

You might fail to pay a small amount of your taxes because of a simple error made when trying to calculate your tax burden. After all, the rules in this area can be complicated. However, the presence of Bitcoin transactions can draw the suspicion of law enforcement. The subsequent misunderstandings often require a lawyer to explain the transactions in the best possible light.

If you are facing a criminal prosecution that involves digital currency, you should not hesitate to consult California Bitcoin attorney Roger E. Naghash for guidance. Mr. Naghash will understand the charges at issue and the subtleties of this evolving area in technology. Criminal investigations can lead to prison sentences, steep fines, and permanent damage to employment and educational opportunities. You need a tenacious defender when so much is at stake. Contact our Southern California office at (949) 955-1000, or use the contact form on our website.