December 04, 2023 Last Updated: October 16, 2025 by Anthony Riccio
Cryptocurrency has opened the door to new opportunities and new risks. While digital assets like Bitcoin and Ethereum have become more mainstream, Massachusetts residents are also seeing a rise in scams and fraud tied to crypto investments.
State and federal regulators are paying close attention, and the laws governing these cases continue to evolve. If you live in Massachusetts and face allegations of cryptocurrency fraud, or if you have been a victim, it is important to understand how the law applies and what defenses exist.
The use of cryptocurrency in daily transactions and investments has grown rapidly, but with it comes significant risk. Fraudsters use crypto’s speed, anonymity, and international reach to target unsuspecting individuals.
“Since the start of 2021, more than 46,000 people have reported losing over $1 billion in crypto to scams,” according to the FTC’s Consumer Protection Data Spotlight (June 3, 2022).
Massachusetts has treated these scams as serious crimes. The Attorney General has issued warnings, and federal prosecutors in the District of Massachusetts have launched civil forfeiture actions against assets tied to crypto fraud. The message is clear: digital fraud is being pursued with the same intensity as traditional financial crimes.
Fraudsters use many tactics to trick victims into sending cryptocurrency. Some of the most common include:
Because these scams are carried out online, they often fall under federal wire fraud statutes in addition to state consumer protection laws.
Cryptocurrency fraud here is prosecuted under a mix of state and federal laws, with local regulators often coordinating with federal agencies.
Federal Wire Fraud (18 U.S.C. §1343).
Wire fraud applies when electronic communications are used “to obtain money or property by means of false or fraudulent pretenses.”
Because crypto transactions almost always involve the internet, many cases are charged federally. Convictions can result in prison time, fines, restitution, and forfeiture.
Massachusetts Chapter 93A (Unfair and Deceptive Practices).
This law allows the Attorney General or private parties to pursue damages when consumers are misled or defrauded. In some cases, damages can be tripled, and attorney’s fees awarded.
Massachusetts Uniform Securities Act (Chapter 110A).
Tokens and initial coin offerings (ICOs) may be treated as securities. Offering or selling them without proper registration, or making false statements in the process, can trigger enforcement by the Massachusetts Securities Division or the SEC.
Massachusetts Money Transmission Law (2025 Amendments).
The Massachusetts Money Transmission Law was amended in January 2025 to require licensing for domestic transmission and stored value. Operative provisions take effect October 1, 2025.
This change means that businesses operating crypto ATMs, wallet apps, or exchanges that transmit funds within the United States will soon need a license from the Division of Banks.
Investigations into cryptocurrency fraud are often complex. Federal agencies use blockchain analytics to trace funds, issue subpoenas to exchanges, and follow digital money across borders. Massachusetts authorities have worked alongside federal prosecutors to seize wallets and freeze assets connected to scams.
For the defense, these same tools raise questions. Blockchain analysis relies on assumptions that may not always be accurate. Misattribution of wallets, tracing errors, or incomplete records can undermine the government’s case. A seasoned Boston criminal defense lawyer familiar with financial crime can highlight these flaws and present alternative explanations to a jury.
Defense strategies also focus on proving lack of intent, showing that transactions were legitimate, or questioning whether tokens qualify as securities. Jurisdiction and venue may also be contested if transactions cross state or national borders.
Expert testimony is often crucial to explain blockchain mechanics to a jury and challenge government interpretations.
Facing accusations of cryptocurrency fraud can be overwhelming. The first step is to preserve any records, including wallet histories, emails, and device data. Speaking with a Massachusetts cryptocurrency fraud lawyer early can help protect rights and build a strategy before charges escalate.
For victims, the Massachusetts Attorney General advises filing a complaint immediately.
The Massachusetts AG urges residents who sent crypto to scammers while in Massachusetts to file a complaint; the office may use blockchain analytics to help trace funds and shut down scam sites.
Victims should also be aware of fraudulent “recovery” services, which often target those already scammed.
|
Scenario |
Law | Enforcer | Outcome |
Massachusetts Note |
| Pig-butchering scam | Wire fraud (§1343) | DOJ / USAO-MA | Prison, restitution | MA victims targeted |
| Token/ICO sales | Chapter 110A | Securities Div. / SEC | Injunctions, penalties | ICO sweeps, investor alerts |
| Consumer deception | Chapter 93A | AG / Private suits | Treble damages, fees | Applied in digital fraud |
| Crypto ATMs / wallets | Money Trans. Law | Division of Banks | Licensing, penalties | Domestic transfers in 2025 |
This state has been at the center of new enforcement actions. In 2024 and 2025, prosecutors filed civil forfeiture cases against assets tied to pig-butchering scams targeting Massachusetts residents. These actions show how aggressively authorities are pursuing crypto-related fraud.
The 2025 Money Transmission Law is another significant development. By requiring licenses for domestic transfers and stored value, the state is signaling closer oversight of crypto exchanges, kiosks, and apps. Businesses and individuals involved in transmitting cryptocurrency should prepare for this compliance shift.
Investor alerts from the Massachusetts Securities Division also warn about fraudulent ICOs, Ponzi schemes, and risky digital asset offerings. This trend shows that regulators are working to balance consumer protection with innovation.
No, cryptocurrency is not illegal, but scams, unlicensed transmission, and fraudulent offers may lead to charges under state and federal laws.
Yes, scams involving electronic communications to defraud victims often fall under federal wire fraud statutes, which carry serious penalties.
It is a romance and investment hybrid scam. Federal prosecutors in Massachusetts have filed civil forfeiture actions against assets tied to these schemes.
File a complaint with the Massachusetts Attorney General’s office, which may use blockchain analytics to trace funds and shut down fraudulent operations.
Yes, beginning October 1, 2025, domestic transmission and stored value businesses require a license under the amended Money Transmission Law.
Defenses include challenging intent, questioning blockchain analysis, raising jurisdictional issues, and using expert testimony to explain transactions.
Cryptocurrency fraud is on the rise in Massachusetts, and the laws addressing it are becoming sharper each year. Federal wire fraud statutes, Chapter 93A, the Uniform Securities Act, and the new Money Transmission Law all play a role in shaping how cases are investigated and prosecuted. Victims are urged to report scams quickly, while those accused must prepare a strong defense grounded in both law and technology.
Riccio Law understands the complexities of these cases. With experience in financial crime and Massachusetts law, the firm is prepared to guide clients through investigations, charges, or scam-related concerns. If you need help, consider speaking with a dedicated Massachusetts cryptocurrency fraud defense lawyer who can protect your rights and provide clear direction forward.
