Page 12 - January 2019 | Cleveland Metropolitan Bar Journal

BarJournal CRIMINAL LAW

JULY/AUGUST 2015
fEATUrE Emerging Trends

in Cybercrime

BY MADELYN J. GRANT

ore often than not, young spreading in these new areas of technology are breaking established laws of the existing
attorneys see large, complex across the globe, a brief description of some of criminal code using these new tech platforms.
technology cases and these technologies is warranted. Therefore, it is not so much about how the
immediately assume they government is formulating new laws, but
Mdon’t have the resources Cryptocurrency rather how they are properly, or improperly,
or experience to handle them. However, Cryptocurrency, first released in 2009, is a applying the criminal code to these new
perhaps these less experienced attorneys have digital or virtual currency designed to work types of tech. For example, the SEC has
a unique advantage to successfully litigate as a medium of exchanges. The currencies use attempted to address an influx of questions and
criminal matters simply from growing up in decentralized control as opposed to centralized confusion surrounding cryptocurrency, but
an environment inundated with technology. banking systems. The decentralized control even governmental entities are unable to offer
Accordingly, newer practitioners should be of each cryptocurrency works through ledger concrete answers to basic questions at this time.
mindful of what these cases entail, embrace technology, typically a blockchain, that serves “When advising clients, designing products and
their proficiency in technology, and not shy as a public database of all transactions. Criminal engaging in transactions, market participants
away from defending against tech-based prosecutions involving cryptocurrency tend to and their advisors should thoughtfully consider
prosecutions. stem from the platforms or companies that allow our laws, regulations, and guidance, as well as
As 2019 begins, the world of cybercrime is customers to buy, sell and trade cryptocurrency. our principle-base securities law framework,
progressing with new trends in technological which has served us well in the face of new
investigations and prosecutions. With every Online Gambling & Investments developments for more than 80 years.” SEC
emerging tech-trend follows a new set of Internet gambling is currently illegal in a Public Statement, Chairman Jay Clayton,
challenges for those attorneys willing to learn majority of states, but a small number have December 11, 2017. From this statement, it
about the field and defend against prosecutions legalized state regulated operations. However, is clear that even the SEC recognizes areas of
of this magnitude. If not versed in technology, gambling, gaming, and investment platforms concern for those advising clients on if and how
defending clients in cases involving new can be easily accessed by U.S. citizens via to utilize cryptocurrency.
and developing trends can feel like entering foreign sites. New software to support these Importantly, although the bones of these
a boxing ring with both hands tied behind websites emerges each day that tends to flag prosecutions may appear familiar— e.g. fraud,
your back. Not only must a defense attorney the government’s interest. For example, binary misrepresentation, theft—the tech aspects
understand how the underlying technology option trading, is a “yes or no” investment complicate traditional crimes in a way that
works, but also must have the resources option based on an underlying “derivative drastically changes the manner in which these
and manpower to match the army of agents asset” with a set expiration. Generally, binary cases are defended. Now, a defense attorney
and prosecutors working fiercely for the option trading consists of a buyer and a seller must determine whether traditional laws
government. with prices ranging between $0 and $100. The are not only being applied properly to the
As law enforcement consistently utilizes initial cost of a binary trade depends on the technology at hand, but more importantly,
immense resources to investigate and current price of the underlying asset, compared whether the conduct utilizing this technology
prosecute new types of tech, the defense bar to the predicted future price (called the strike actually violates the existing law. For instance,
is discovering just how difficult it can be to price). Presently, there is much government the traditional line of what qualifies as a
defend against these charges. Although some interest in curbing abuses of binary platforms misrepresentation or willful deception of a
may view all cyber cases as one in the same, purported to be misleading users. customer may now be blurred. If an individual
the truth could not be further from such These new areas of investigation and chooses to invest money in a company that
an assumption. The fastest growing areas prosecution differ from traditional crimes sells or converts cryptocurrency, or in an
of cybercrime include cryptocurrency use, as established laws are being applied to online betting operation, what precautions
online gambling and investments, blockchain new technology. There is a general sense of do these companies have to take in order to
transactions, smart contracts, data breaches confusion surrounding how these areas of tech ensure that the customer fully understands
and privacy violations. Because criminal intersect with criminal law. This intersection the potential risks and rewards? What does
investigations and prosecutions are rapidly lies in how individuals and corporations “Due Diligence” mean for today’s developers
12 | Cleveland Metropolitan Bar Journal clemetrobar.org