Lathrop GPM Partner Dale A. Werts was recently quoted in a Missouri Lawyers Media article exploring the significant challenges attorneys face when navigating client losses due to cryptocurrency fraud. The article highlights that while the underlying fraud schemes are not new, the use of cryptocurrency has introduced complex issues of jurisdiction, service, enforcement, and compliance, often without clear regulatory or judicial guidance.
Werts emphasizes, “The same fraud scams have been around forever. It’s just now they’re using cryptocurrency.” He illustrates the deceptive nature of these scams, noting that victims are often told they have substantial earnings but need to pay a “fee” to withdraw funds, only for the platform to vanish. “You’ll hear from clients who’s been told they have $500,000 in earnings, but they need to pay $50,000 to withdraw it,” Werts explains. “They’ll send the money and then the platform vanishes. The $500,000 never existed.”
The article details the difficulty of recovering lost funds due to the anonymity and international nature of these crimes. While discussing potential policy and legislative fixes, Werts advocates for federal legislation to streamline the legal landscape. He states, “I think most of us would like to see some federal legislation, because federal legislation is a great way to be more efficient, because now I don’t have to look at 50 different states… it’s a big question about what law applies.” He concludes, “It’s just very inefficient, so if you get a federal statute that trumps all the state statutes, then you brought some efficiency.”
Werts also stresses the importance of continuous vigilance in the rapidly evolving digital landscape. “This is a game, because the world moves so fast now you have to stay up on it all the time,” he advises. “You can think your safety measures are up to snuff, until tomorrow, and guess what? They’re not the latest anymore… One of the best pieces of advice I give people is: Don’t trust anybody. Not until you’re absolutely certain.”
Read the full Missouri Lawyers Media article here: Attorneys face uphill battle in cryptocurrency fraud recovery
The piece was additionally cross-posted by Minnesota Lawyer.