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Grant Thornton joins global network to combat crypto fraud

Author: ICAEW Insights

Published: 17 Aug 2021

A new global network set up to share best practice and tackle crypto fraud has launched in London with Grant Thornton joining forces as the scale of crypto-fraud continues to ramp up.

The ‘Crypto Fraud and Asset Recovery’ network or CFAAR claims to be the first global network for crypto fraud and asset recovery professionals amid recognition that a joined-up approach stands to provide victims of fraud with the best possible means of redress in this nascent area of practice.

In addition to Grant Thornton, CFAAR’s eight founding members are a combination of practitioners leading the first crypto-related disputes before the English courts, and those actively involved in global crypto fraud investigations, forensics, advocacy and the tracing and recovery of cryptoassets. They include law firms Osborne Clarke, Rahman Ravelli, Stewarts, RPC asset recovery specialist Asset Reality and barristers Twenty Essex and Essex Court Chambers.

The network plans to host regular meetings and events including seminars and conferences to help develop skills, as well as being a voice for the crypto-fraud sector on judicial and regulatory reviews and consultations. It is hoped to position the UK at centre stage for crypto dispute resolution.

The network’s launch comes against a backdrop of burgeoning crypto-related fraud, including those involving cryptocurrency theft, initial coin offerings (ICOs) and ransomware attacks. Cryptocurrency scammers raked in $4.3bn worth of digital money in 2019, more than triple 2018’s haul. That’s according to the latest in a series of recent data drops by blockchain analytics firm Chainalysis in its The 2020 State of Crypto Crime report.

Carmel King, a Director in Grant Thornton’s Insolvency and Asset Recovery practice who is leading the firm’s crypto efforts, said: “The kinds of frauds that we’re seeing are investment scams, Ponzi schemes, romance scams, fake apps and websites or fake social media posts encouraging people to invest in fake tokens.” 

Lawrence Collins, former Justice of the UK Supreme Court warned that while London had long been a pre-eminent financial and professional centre, it may also be turning into a centre for international financial crime. “Where there is innovation, criminals are not far behind. The latest example is crypto fraud.”

Collins also warned that criminal enforcement is not a sufficient remedy for victims. “The professions have to arm themselves to help clients who have been the victims of fraudsters who offer unbelievable returns in fake offerings, or who create false cryptoassets and false exchanges, and then hide the proceeds of crime through complex webs.”

“In the work that I do in fraud investigation and asset recovery, I can bring things like corporate intelligence, digital forensics and asset recovery skills to the table, but I need to work with lawyers, barristers and others in order to be successful,” King added. “Really strong case law has been made in the UK around cryptoassets and the granting of disclosure orders against exchanges and third parties. This field is going to be very significant in years to come and we need to support that.”

To register your interest in becoming a member of CFAAR, join the network’s LinkedIn group "CFAAR – Crypto Fraud and Asset Recovery" Follow on Twitter @CFAARNETWORK.

Visit ICAEW’s dedicated Blockchain page from the IT Faculty, which collates useful information and resources on the distributed ledger technology and its applications.

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