Crypto and Digital Asset Fraud & Recovery

Registration and Networking

C5 Welcome

Co-Chairs’ Opening Remarks

Dani Haston
SVP, Customer Success
Asset Reality

Racheal Muldoon
Barrister
Maitland Chambers (UK)

Dan Wyatt
Partner
Reynolds, Porter Chamberlain LLP (UK)

Detecting and Recovering Crypto and Digital Assets: Avoiding Common Misconceptions that Can Derail Your Case

Cara Cameron
Partner
Woods (Canada)

Dara Barkhordar
Principal
Kobre & Kim

Sarah Murray
Partner
Stevens & Bolton LLP (UK)

In the ever-changing landscape of digital asset fraud, many fraud and asset recovery practitioners face mounting challenges in the areas of cryptocurrency, NFTs, blockchain, smart contracts and other digital assets. The uncertainty in these areas can quicky derail your case if they are not well understood; and can create a variety of issues and challenges.

Join us in this two-part, highly interactive primer session as we:

1. Define and unpack the complexities of detecting fraud and tracing assets across the chain, such as:
• The Metaverse
• Decentralized Autonomous Organizations (DAOs)
• Non-Fungible Tokens (NFTs)
• Smart Contracts
• Decentralized Finance Bridges (DeFis)
2. Examine the latest developments and best practices for tracing and recovering these assets, including:
• Are there tools available to prevent Pig Butchering Scams?
• Are crypto assets treated as traditional assets for the purpose of asset recovery?
• Do mixers/tumblers stop asset recovery in its tracks?

Update on the FTX Saga

Nik Yeo
Barrister
Fountain Court Chambers

Edward Macnamara
Partner
PwC United Kingdom

The FTX scandal made it clear that corporate mismanagement in crypto businesses continues to loom as an existential threat in the Fraud and Asset recovery landscape. Join us for this session to learn about what really happened at FTX, labeled as unprecedented situations resulting from a “complete failure of corporate controls and a complete absence of trustworthy financial information”.

We will discuss many aspects of the scandal and answer questions such as:

• Was it a fraud or just a collection of inexperienced and irresponsible twenty-somethings very out of their depth?
• How was this able to happen?
• What can this community do to prevent such failures in the future?
• What are the challenges in recovering assets?
• What are the prospects of FTX’s creditors receiving compensation?

Networking Break

Update from the Crypto Experts

Aidan Larkin
Co-Founder & CEO
Asset Reality (UK)

Jo Jenkins
Regional Head of Compliance – Europe and UK
Binance (UK)

Chrissy Hill
Chief Operating Officer (interim) & Chief Legal Officer
Parity Technologies (UK)

Dina White
General Counsel
Zodia Markets (UK)

Join us in this informative session as our panel of crypto experts offer detailed responses to many of the questions you want to know the answers to, such as:

• What does the future of crypto look like?
• What lessons have crypto natives taken from the last 12 months?
• How are they helping rebuild trust in the ecosystem?
• What challenges do they think the professional services sector should be focused on?
• What are their thoughts on international recognition of court orders in a decentralized and borderless ecosystem?

Crypto and Digital Assets as Securities?: An Examination of Whether or Not Digital Assets Should be Subject to Regulation

Tim Aron
Barrister
Minerva Chambers

Brendan McGurk KC
Barrister
Monckton Chambers

Warren Gluck
Partner
Holland & Knight LLP (USA)

The rapid expansion of digital assets has seen abundant debate about whether they should be classified as currencies or securities – which would subject them to regulations. Crypto Exchanges and other digital token providers have been adamant that most digital assets operating on blockchain do not fit the definition of securities, while some regulatory agencies have determined that some specific assets are securities that are subject to registration and disclosure.

In this session our panel will discuss the factors to be examined and questions to be answered when determining if digital and crypto transactions qualify as “investment contracts” that are subject to regulation, such as:

• Are Crypto Exchanges “common enterprises”?
• Is there an investment of “money”?
• Do investors have a reasonable expectation of profit?
• Are any such profits derived from the “efforts of others”?
• Do developers and Exchanges have the burden or proving they are NOT securities?

Networking Lunch

Crypto Exchange Liability and Duties of Care: What is “Fair and Reasonable” and When Can a Crypto Exchange Be Found Negligent for Failing to Prevent Fraud

Saima Hanif KC
Barrister
3 Veralum Buildings (UK)

Jeffery Onions KC
Barrister
One Essex Court (UK)

Christopher Levers
Partner
Ogier (Cayman Islands)

Justina Stewart
Barrister
Outer Temple Chambers (UK)

Crypto fraud poses a huge challenge for the Exchanges and their customers, and Exchange employees are usually in a position to spot and block – or report – suspected fraud. In addition, there is the particular problem of the civil liability imposed on them for failing to spot fraud negligently.

Compounding the challenges with determining intent and liability is the fact that there is no all-inclusive body of law that really defines the legal nature of digital asset transactions – and the liabilities that go along with any such rights.

Join us in this session as our panel of experts discuss the liabilities, barriers to recovery, and steps that can be taken to compensate the victims of crypto frauds, such as:

• Practical difficulties for Exchanges when the duty arises for individuals
• The civil law approach to Exchange liability
• The need to balance “fair and reasonable” measures to reduce fraud risk while striving to maintain an effective system
• The “reasonably competent” standard of care
• Scenarios in which an Exchange can be liable for fraud; and the barriers to recovery

AI Manipulation and Deepfakes: How Fraudsters are Utilising AI to Perpetrate Frauds on Individuals and Financial Institutions

Racheal Muldoon
Barrister
Maitland Chambers (UK)

Christopher Whitehouse
Senior Associate
RPC

Deepfake technology has created another level of fraud that is popping up in Crypto and Know Your Customer (KYC) scams. Deepfake artificial intelligence tools use machine learning to create convincing audio, images or videos featuring a person’s likeness – which is increasingly being used for scams and hoaxes on individuals and financial institutions.

For many fraud and asset recovery practitioners, the areas of AI and deep fake technology are not well understood and create a variety of issues and challenges. Be sure to join us in this session as we define and unpack the complexities of these technologies; examine the latest developments; and answer the most crucial questions for counsel, consultants, and regulatory agencies to prevent these high-tech scams; such as:

• Is AI and deep fake fraud trending towards becoming the newest existential threat for fraud and asset recovery practitioners?
• What steps can be taken for risk management and incident prevention?
• What can the digital asset and blockchain communities do – if anything – to prevent such scams in the future?
• What are some of the tools that can be used to counter simulated voices and voice recognition frauds?
• How can facial recognition technology play a role in reducing fraud and crime?
• What are the parameters and goals of the EU AI Act; the world’s first comprehensive AI Law?

Networking Break

Decentralized Autonomous Organizations (DAOs): Overcoming the Challenges to Managing Clients and Preventing Fraud in a Purely Decentralized “Entity”

Benjamin Bathgate
Partner
WeirFoulds LLP (Canada)

Amy Harvey
Executive Partner
Ontier

Alex Potts KC
Barrister
4 Pump Court

DAOs are known to operate as a community with automated efficiency, transparency and no central authority – based completely on trust and transparency – which in theory minimizes the risk of stolen funds. However, they are also very vulnerable to hackers that have the ability to exploit vulnerabilities and the lack of security when managing crypto and other digital funds.

In this session we will discuss the risks, practical difficulties, legal battles and governance structures associated with DAOs – and best practices for overcoming these challenges when representing DAOs, such as:

• Difficulties in managing clients that can number in the hundreds
• The lack of a well-developed and efficient infrastructure to manage reporting, treasury management, governance, payroll, and communication
• Managing the various types of assets often associated with DAOs
• Navigating smart contracts and security issues that can lead to fragmenting and splits of DAOs

Networking Drinks Reception

Networking Breakfast

Co-Chairs’ Opening Remarks

Dani Haston
SVP, Customer Success
Asset Reality

Racheal Muldoon
Barrister
Maitland Chambers (UK)

Dan Wyatt
Partner
Reynolds, Porter Chamberlain LLP (UK)

Cryptocurrency Insolvency and Wind-Down: How the High Volatility of Crypto Assets Has Substantially Increased the Risk of Insolvencies and Bankruptcy Wind-Down

Charlotte Hill
Partner
Penningtons Manches Cooper LLP

David Johnson
Senior Associate
PCB Byrne LLP (UK)

William Redgrave
Partner
Baker & Partners

Molly Sandquest
Senior Manager, Forensic Services
FRP Advisory

Recent years have seen numerous cryptocurrency exchange bankruptcies, and these insolvency events have led to extensive interrogation and criticism of the inner workings of exchanges. The rapid growth of Exchanges and other digital asset companies that did not practice proof of reserves, lack of self-custody, and the high volatility of crypto assets have substantially increased the risk of insolvencies in the industry.

Be sure to join us in this session as a panel of global experts will explore how exchange customers can potentially identify and recover their crypto assets deposited with exchanges when they subsequently become subject to liquidation, wind-downs, or other insolvency processes.

The Fringes of Digital Asset Fraud: An Examination of Digital Assets Held in the Metaverse and Outside of Centralised Exchanges

Tara Annison
Head of Product
Twinstake (UK)

Dani Haston
SVP, Customer Success
Asset Reality

In this session our Crypto experts will take an in-depth look at the problematic nature of recovery in digital asset fraud with assets that are not held in traditional Exchanges. We will examine what is on the horizon in these growing areas of fraud, such as:

• Financial metacrimes
• Gender-based scams
• Wash trading
• Money laundering
• Augmented reality threats
• Digital radicalization

Networking Break

Crypto Disputes and the Standard Suite of Relief for Victims: What it Takes to Recover for Your Client

Sam Roberts
Partner
Cooke, Young & Keidan LLP

Kyla Curley
Partner
StoneTurn (USA)

James Ramsden KC
Partner
Astrea Group Ltd.

There is still a lot of uncertainty regarding the underlying substantive crypto claims relating to fraud, where there arguably remain more questions than answers. However, when it comes to crypto frauds, most transactions will be publicly viewable through the blockchain, and this may actually be of great help to in the context of digital asset-tracing and enforcement. As a result, investigators and litigators will be better prepared to follow transfers of crypto from wallet to wallet; and ultimately into the central exchanges.

It is then that litigators can break out the familiar toolkit of disclosure and freezing orders to secure the misappropriated funds and uncover who may be behind the wrongdoing. Join this session to take a deeper dive into crypto disputes and consider recovery issues such as:

• The types of substantive claims relating to crypto fraud, the potential pitfalls and strategic considerations
• How to combat fraudsters that are using blockchain to conceal their activity and evade detection
• How crypto fraudsters commonly seek to off-board fraudulently obtained crypto or fiat
• Understanding some of the unique and advanced types of crypto fraud; including: scam ICO’s, pump and dump schemes, exit scams, phishing and advanced ponzi shemes
• The best strategies for serving freezing orders and injunctions against unknown individuals and organizations

The Fight Back Begins: Private and Public Sector Law Enforcement Team Up to Take the Fight to the Fraudsters and Recover Assets for Victims

Ashley Fairbrother
Partner
Edmonds, Marshall, McMahon (UK)

Jason Knowles
Lead Cryptocurrency Investigator
North Wales Police

Mark Taylor
Head of Financial Crime
CEX.io

We are all too familiar with countless examples of fraud victims losing all their funds and retirement savings through crypto and digital asset scams. In most instances, it is extremely challenging for practitioners, investigators and law enforcement to track and recover these assets; but the chances for recovery increase dramatically when these crime fighters come together. Be sure to join us in this session as we hear about a success story – with a step-by-step cooperative approach to recovery.

Networking Lunch

A View from the Regulators

James Curt Bohling
Acting Principal Deputy Chief, Money Laundering and Asset Recovery Section, Criminal Division
U.S. Department of Justice (USA)

Professor Sarah Green
Commissioner for Commercial and Common Law
Law Commission of England and Wales

Glenford Malone
Deputy Managing Director, Regulation
BVI Financial Services Commission

Regulatory support can be essential for recovering lost or stolen crypto assets as some exchanges and other companies fail to: implement the core components of an effective AML program; implement comprehensive know-your-customer (KYC) protocols; and, often fail to systematically monitor transactions. When faced with the challenge of recovering stolen or lost crypto assets, regulatory support can be crucial.

Join us in this session as our regulators discuss some of their most well-known and successful prosecutions, by detailing how their resources have helped bring to justice individuals and companies who engaged in fraud, pig butchering scams, and laundered criminal proceeds through cryptocurrency.

Property or Not: Digital Assets as Protectable Assets?

Sophie Eyre
Parnter
Bird & Bird

Bushra Ahmed
Partner
KBH (United Arab Emirates)

Michael Fealy KC
Barrister
One Essex Court (UK)

Cryptocurrency and digital assets continue to raise the question of how to legally classify them. Are they property, security, actual currency, or some other form of tangible asset? There is no universal consensus on this issue and depending on the jurisdiction and the agreement between the parties, specific classification of these forms of assets might impact the ability to get freezing injunctions or other forms of interim relief.

Several jurisdictions have recently held that various forms of digital assets are a form of legal property, while others are still grappling with the issue of property rights. Join us in this session as our experts share several different perspectives and recent case law decisions in this growing area by discussing:

• “Person Unknown” injunctions and asset freezing orders
• Legitimate claims to exclusivity
• Assessing and verifying ownership and methods for accurately tracing NFT transactions
• Exclusive possession or control
• Accompanying rights that owners can assert in court and recognition as collateral
• Exclusion of ownership claims
• Possessory interests and intellectual property protections for the underlying asset

End of Conference | Thank you!