For cryptocurrency companies, investors, executives, and individuals who use digital assets, the new law is about more than financial regulation. Increased regulation can also mean increased federal scrutiny, additional financial records, and new avenues for government investigations involving cryptocurrency transactions.

If you are facing a federal cryptocurrency investigation, have received a subpoena, or believe federal agents are investigating transactions involving stablecoins or other digital assets, understanding this changing regulatory environment is important.

What Is the GENIUS Act?

The Guiding and Establishing National Innovation for U.S. Stablecoins Act, commonly called the GENIUS Act, was signed into law on July 18, 2025.

The law establishes a federal framework governing payment stablecoins—digital assets generally designed to maintain a stable value by reference to the U.S. dollar or another monetary value.

Among other requirements, the GENIUS Act regulates who may issue payment stablecoins, establishes reserve and disclosure requirements, and incorporates permitted stablecoin issuers into federal anti-money-laundering and financial-compliance regimes.

While the law is primarily regulatory, its requirements may also have important consequences in federal criminal investigations involving cryptocurrency.

Does the GENIUS Act Make Cryptocurrency Illegal?

No.

The GENIUS Act does not make cryptocurrency or stablecoins illegal, nor does it make ordinary cryptocurrency transactions criminal.

Instead, the Act creates rules governing payment stablecoin issuers and establishes federal and state regulatory requirements for those businesses.

That distinction is important. The use of Bitcoin, Ethereum, stablecoins, or other digital assets does not by itself demonstrate criminal activity.

Nevertheless, cryptocurrency transactions can become evidence in federal investigations involving alleged fraud, money laundering, sanctions violations, narcotics offenses, tax crimes, or illegal money transmission.

How Could the GENIUS Act Affect Federal Cryptocurrency Investigations?

One significant feature of the GENIUS Act is its relationship with the Bank Secrecy Act and federal anti-money-laundering laws.

Permitted payment stablecoin issuers are treated as financial institutions for purposes of the Bank Secrecy Act and are subject to anti-money-laundering and sanctions compliance obligations.

As federal regulators implement these requirements, stablecoin issuers may maintain significant information concerning customers and transactions.

That information can potentially become relevant to a federal investigation.

Depending on the circumstances, investigators may seek information through subpoenas, search warrants, court orders, or other legal process. Federal agencies may also use blockchain analytics to follow transactions between cryptocurrency wallets and combine that information with records obtained from cryptocurrency exchanges, banks, stablecoin issuers, and other financial institutions.

Can Federal Agents Trace Stablecoin and Cryptocurrency Transactions?

In many cases, yes.

A common misconception is that cryptocurrency transactions are necessarily anonymous. Many blockchain transactions are recorded on public ledgers that preserve a permanent history of transfers between wallet addresses.

The more difficult issue is often determining who controls a particular wallet.

Federal investigators may attempt to connect a cryptocurrency wallet to a particular individual through exchange records, banking information, IP information, electronic devices, communications, Know Your Customer records, or other evidence.

The government may then attempt to reconstruct the movement of funds across multiple wallets and exchanges.

But tracing cryptocurrency is not the same thing as proving a federal crime.

In a criminal case, important questions may remain concerning who actually controlled a wallet, who authorized a transaction, what the person knew, and whether the government can prove the required criminal intent.

What Federal Crimes Can Involve Cryptocurrency or Stablecoins?

Cryptocurrency investigations can involve numerous federal criminal statutes. Depending on the allegations, prosecutors may investigate offenses including:

• Money laundering
• Wire fraud
• Bank fraud
• Securities or commodities fraud
• Conspiracy
• Operating an unlicensed money transmitting business
• Bank Secrecy Act violations
• Economic sanctions violations
• Tax offenses
• Narcotics-related money laundering
• Forfeiture of cryptocurrency and other digital assets

The existence of cryptocurrency transactions does not establish that any of these crimes occurred. Federal prosecutors must still prove the elements of the particular offense charged.

Cryptocurrency and Federal Money Laundering Investigations

Money laundering is one area in which cryptocurrency transactions frequently receive significant scrutiny.

Federal investigators may examine whether digital assets were used to conceal the source, ownership, location, or movement of funds allegedly connected to criminal activity.

These investigations can become extremely complicated.

Funds may move through multiple wallets, exchanges, stablecoins, decentralized protocols, or different blockchain networks. The government may rely on blockchain-analysis software to reconstruct those transactions.

A defense investigation may therefore require careful examination of the government’s blockchain analysis, the attribution of particular wallets, the underlying financial transactions, and the evidence concerning the client’s knowledge and intent.

Can Cryptocurrency Be Seized by the Federal Government?

Yes. Federal authorities may seek to seize cryptocurrency when they contend that the digital assets constitute proceeds of criminal activity, were involved in money laundering, or are otherwise subject to federal forfeiture laws.

Cryptocurrency seizures can occur during an investigation or after criminal charges have been filed.

The government may seek forfeiture of Bitcoin, stablecoins, other cryptocurrency, bank accounts, real estate, vehicles, or other property allegedly connected to an offense.

Importantly, a seizure does not necessarily mean that the government ultimately has the right to keep the property. Depending on the circumstances, there may be legal procedures available to challenge a seizure or forfeiture.

What Should You Do If You Receive a Federal Cryptocurrency Subpoena?

Receiving a grand jury subpoena, target letter, search warrant, or contact from a federal agent should be taken seriously.

A person who learns of a federal cryptocurrency investigation should consider speaking with an experienced federal criminal defense attorney before communicating with investigators.

Statements made during the early stages of an investigation can become significant later. Even someone who believes they have done nothing wrong can create additional problems by making inaccurate, incomplete, or misunderstood statements to federal agents.

An attorney can evaluate the investigation, communicate with prosecutors or agents when appropriate, determine whether the client may be considered a witness, subject, or target, and begin preserving and reviewing relevant evidence. We are here to help. Contact us now.

Which Federal Agencies Investigate Cryptocurrency Crimes?

Depending on the allegations, cryptocurrency investigations may involve agencies including the Federal Bureau of Investigation (FBI), Internal Revenue Service Criminal Investigation (IRS-CI), Drug Enforcement Administration (DEA), Department of Homeland Security, U.S. Secret Service, Department of Justice, Financial Crimes Enforcement Network (FinCEN), or other federal agencies and regulatory authorities.

Some investigations involve multiple agencies working through a federal task force.

Because cryptocurrency can cross state and international borders quickly, federal jurisdiction may become an important part of these cases.

The GENIUS Act May Mean Greater Regulatory Scrutiny

The GENIUS Act represents an important development in the federal regulation of digital assets.

For legitimate cryptocurrency businesses and users, greater regulatory clarity may provide significant benefits. At the same time, a more developed regulatory system can produce additional compliance requirements, transaction records, reporting obligations, and government oversight.

Those developments may become particularly important when federal prosecutors investigate alleged money laundering, fraud, illegal money transmission, sanctions violations, or other financial crimes involving digital assets.

Facing a Federal Cryptocurrency Investigation?

Federal cryptocurrency cases can combine complicated criminal statutes with highly technical blockchain evidence.

If you have received a federal grand jury subpoena, target letter, search warrant, or request for an interview, or if cryptocurrency has been seized by federal authorities, obtaining legal advice early in the investigation can be critical.

Conaway & Strickler, P.C. represents individuals facing serious federal criminal investigations and prosecutions. Our attorneys can evaluate the government’s allegations, examine the financial and digital evidence, and develop a defense strategy based on the specific facts of the case.

If you are under investigation for an alleged federal offense involving cryptocurrency, stablecoins, money laundering, fraud, or digital assets, contact Conaway & Strickler, P.C. to discuss your case.

This article is provided for general informational purposes only and does not constitute legal advice. Reading this article or contacting the firm does not create an attorney-client relationship.

The regulatory climate at the U.S. Securities and Exchange Commission (SEC) has shifted dramatically. Under Chairman Paul Atkins and Enforcement Director David Woodcock, the agency has rolled out a sweeping overhaul of its Enforcement Manual and adopted a “back-to-basics” philosophy.

The message to Wall Street and corporate insiders is clear: the SEC is moving away from chasing headline-grabbing volume and is instead focusing heavily on core fraud, market integrity, and individual accountability.

Recent high-profile SEC complaints and legal decisions reveal exactly where regulators are focusing their resources:

Pre-IPO Scams and Private Fund Fraud

The SEC is aggressively targeting exploitation of the hype around private companies before they go public.

• The Subprime Auto Collapse: The SEC recently charged former executives linked to the catastrophic $1.9 billion collapse of a subprime auto lender, Tricolor, alleging widespread fraud in how the business’s financial health was marketed to backers.
• Pre-IPO Boiler Rooms: Regulators filed a major complaint against a boiler room operator and three affiliated entities for orchestrating a $74 million pre-IPO investment scam targeting everyday retail investors.
• Private Fund Valuation Fraud: The SEC charged private fund adviser Adit Ventures Management, its CEO Eric Munson, and affiliated general partners, alleging fraudulent practices regarding fund assets and disclosures.

Trusts as Regulatory Targets: The Musk Section 13(d) Precedent

If you think hiding behind a trust shield protects you from SEC disclosure rules, think again. In a historic settlement, the Elon Musk Revocable Trust agreed to pay a $1.5 million civil penalty—the largest in SEC history for a Section 13(d) beneficial ownership violation.

The SEC’s complaint centered on an 11-day delay by Musk’s trust in publicly disclosing that it had crossed the 5% ownership threshold in Twitter stock back in 2022. During that brief window of secrecy, the trust quietly bought up an additional $500 million in shares at depressed prices. By amending its complaint to target the trust vehicle directly, the SEC signaled that personal wealth management structures are fully exposed to regulatory enforcement.

WAMCO’s $100 Million “Cherry-Picking” Settlement

Investment advisers are under intense scrutiny for conflicts of interest and breach of fiduciary duties.

The SEC finalized a massive $100 million civil penalty against Western Asset Management Company (WAMCO). The complaint alleged that the Pasadena-based firm failed to implement reasonable safeguards to detect and prevent a long-running “cherry-picking” scheme. A former co-Chief Investment Officer allegedly allocated winning trades to favored accounts while dumping losing trades onto retail clients.

The Supreme Court Hands the SEC a Disgorgement Hammer

Perhaps the biggest development for active SEC complaints isn’t a new filing, but a landmark ruling from the U.S. Supreme Court. In Sripetch v. SEC, the Court ruled unanimously that the SEC does not need to prove investors suffered an actual financial loss to demand the disgorgement of illegal profits.

Previously, defense lawyers could fight SEC complaints by arguing that their clients’ accounting maneuvers or delayed filings didn’t cause direct mathematical harm to investors. With Sripetch, if the SEC proves the money was made via an illegal rule violation, they can claw it back immediately—significantly strengthening the agency’s hand in pending district-court actions.

The Takeaway: Compliance Over Complexity

The SEC’s strategy centers on advanced forensic accounting to untangle complex corporate shells, private funds, and trust arrangements. Coupled with their newly established Financial Reporting and Accounting Unit, the Commission is heavily incentivizing companies to self-report structural issues early. Contact Conaway & Strickler if you have questions about how Sripetch affects your enforcement risk, or if you have an ongoing SEC matter. We are here to help.

An Indianapolis broker is also being charged with securities fraud and investment fraud by the SEC in relation to Drive Planning LLC, and its alleged $300 million Ponzi scheme. Gerardo “Gerry” Linarducci, a former Managing Partner of Drive Planning and head of its Indiana branch office, was charged on Dec. 19.

It is alleged that from late 2021 until in or about June 2024, Drive Planning, a Georgia based financial advisory group, marketed several investments, including the “Cash Out Real Estate Fund,” or “CORE Fund,” as “easy and simple,” advising prospective investors that the fund provided “100% Passive Income from Tax Liens.” Drive Planning guaranteed investors a return of 10% every six months or a 22% return per year for up to three years. Drive Planning further materially misrepresented that investors’ contributions to the CORE Fund were pooled together, government-protected, and fully collateralized. As part of the scheme, Bradford created a marketing brochure to promote the CORE Fund, which was shared with Drive Planning’s sales agents to solicit investors. 

In actuality, the investors’ monies were being used for other purposes, including to pay off other Drive Planning investors, make commission payments to Drive Planning’s agents, and pay for personal expenditures. Bradford and others at Drive Planning further concealed the scheme to defraud by failing to disclose that Drive Planning did not invest any funds in the CORE Fund after approximately December 9, 2022. To the contrary, even after the Securities and Exchange Commission (SEC) began investigating Drive Planning in approximately March 2024, Bradford and others continued to solicit investments for the CORE Fund. In total, Drive Planning received at least $4.1 million from CORE Fund investors.

In August 2024, the SEC obtained a temporary restraining order against Drive Planning and filed separate civil enforcement actions against Drive Planning and others in the U.S. District Court for the Northern District of Georgia related to the above-described scheme. 

We Can Help

Conaway & Strickler, PC has vast experience representing those who are facing charges from the SEC and the DOJ and we are equally adept at representing victims of investment fraud. We pursue all available legal avenues to recover your lost investments. Contact us should you need representation.