Cryptocurrency may be new, but Illinois prosecutors are treating crypto crimes as seriously as any traditional financial offense. As Bitcoin, Ethereum, and other digital assets grow in popularity, law enforcement has begun to view them as prime targets for fraud and money laundering investigations. Whether you are a trader, business owner, or investor, understanding how Illinois handles these charges is essential if you ever find yourself under investigation.
Under Illinois law, crypto fraud falls under the broader category of financial or wire fraud. The Illinois Criminal Code (720 ILCS 5/17-10.6 and related statutes) covers deceptive practices involving electronic or online transfers. Prosecutors may claim that someone used a blockchain wallet, exchange platform, or digital contract to obtain property or funds through false pretenses.
Common examples include:
Even when the alleged conduct involves anonymous or foreign platforms, Illinois authorities can still prosecute if the scheme affects residents or businesses in the state.
Illinois has a specific money laundering statute (720 ILCS 5/29B-1) that criminalizes transactions intended to conceal or disguise the proceeds of unlawful activity. When applied to cryptocurrency, this may include transferring digital coins through multiple wallets or exchanges to obscure their source.
A person does not need to have committed the original underlying crime to face laundering charges. Simply participating in the transfer of illicit crypto can trigger prosecution if authorities believe the intent was to hide criminal proceeds. Convictions can lead to prison time, heavy fines, and seizure of assets — including your crypto holdings.
State investigations are increasingly sophisticated. The Illinois State Police, the Cook County State’s Attorney’s Office, and local cybercrime units work with blockchain analytics firms to trace transactions. Even though cryptocurrencies are designed to be decentralized, most transactions are publicly recorded on blockchains, allowing investigators to follow the flow of funds.
Investigators often:
Once the paper trail connects the digital wallet to a real-world individual, prosecutors may add charges such as theft by deception, forgery, or computer fraud.
Many cryptocurrency cases in Illinois start as state investigations but later shift to the federal level. This happens when:
At that point, the defendant may face charges under federal statutes such as wire fraud (18 U.S.C. §1343) or money laundering (18 U.S.C. §1956). Federal penalties are typically far harsher, with mandatory prison sentences and asset forfeiture. Having an attorney who understands both Illinois and federal law is critical for protecting your rights in these overlapping jurisdictions.
Defending against crypto fraud or money laundering allegations requires a deep understanding of technology, finance, and state law. A skilled defense attorney will examine whether investigators properly identified the crypto wallet owner, whether any warrants or subpoenas were valid, and whether prosecutors can prove intent beyond a reasonable doubt.
Possible defenses include:
An experienced lawyer can also negotiate with prosecutors to reduce or dismiss charges when evidence is weak or unlawfully obtained.
If you learn you are under investigation, do not attempt to move, sell, or delete any digital assets. Contacting an attorney early can often prevent criminal charges altogether. Your lawyer can communicate with investigators, ensure your rights are protected, and correct misunderstandings before they escalate.
Even innocent individuals can draw suspicion simply by using crypto in business transactions or peer-to-peer payments. Having legal guidance early can make the difference between clearing your name and facing prosecution.
If you have been accused of cryptocurrency fraud or money laundering in Illinois, or believe you are under investigation, contact Glozman Law immediately. Our firm understands the intersection of digital currency, financial law, and criminal defense. We represent clients throughout Chicago and Cook County facing complex white collar and cybercrime charges.
Contact Glozman Law today to schedule a confidential consultation and protect your future before investigators build their case.
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