An SEC subpoena or FinCEN inquiry requires decisions about evidence, deadlines and the company’s legal position. Responding without a plan can expose founders and the business to inconsistent statements or unnecessary disruption. Arkady Bukh Law Firm assists clients seeking U.S. counsel for cryptocurrency-related investigations and enforcement concerns.
The first task is to understand the request. Which entity or individual received it? Is production compulsory? What conduct and time period are covered? Are there related criminal, sanctions or state regulatory issues? Those facts determine the response strategy.
Separate the agencies and the legal questions
The SEC investigates potential violations of federal securities laws. A formal investigation can include subpoenas for documents and testimony. SEC enforcement is civil, although the same conduct can also receive attention from criminal authorities.
FinCEN administers Bank Secrecy Act requirements relevant to covered financial businesses. Its virtual currency guidance analyzes business activities rather than relying only on product labels. Whether an operation has applicable obligations requires examination of what it actually does, including how it accepts or transmits value.
A project should not assume that calling itself a software provider resolves the inquiry. It should also avoid assuming that every developer, wallet product or digital asset transaction has identical obligations. Counsel needs the operational facts and the law applicable to the period under review.
Preserve records before preparing a narrative
An investigation response may require records held across messaging tools, source repositories, cloud services and personal devices used for company business. We help assess the scope of preservation and identify the people responsible for maintaining the relevant information.
Preservation should reach the records that explain how the product worked. Marketing materials alone may not show who controlled customer assets, how fees were earned or how access restrictions were applied. A technical description should be checked against actual implementation and operating records.
Do not rewrite historical materials, delete inconvenient messages or ask employees to align their recollections. Counsel can organize an accurate investigation without changing the underlying evidence.
Prepare a disciplined subpoena response
Our proposed work can include reviewing the request, evaluating lawful objections, discussing scope and timing with the agency, and coordinating collection and review. Privileged material requires separate attention. The final production should be consistent with the applicable obligations and any agreements reached with agency staff.
Founders often want to send an immediate explanation of why their project is lawful. That explanation should follow a review of the key records. An early account that conflicts with later evidence can complicate an otherwise defensible position.
Where testimony or an interview is requested, preparation should address the witness’s actual role and the documents relevant to it. A company spokesperson should understand which facts they know personally and which require verification.
Evaluate individual and company interests
The company’s preferred response may differ from an individual founder’s interests. Counsel should identify whom the engagement covers and whether separate representation is needed. That question becomes especially important when an inquiry examines personal trading, disclosures or management decisions.
An SEC Wells notice, if issued, raises a distinct opportunity to respond to a contemplated enforcement recommendation. It is not a final finding of liability. The response should address the issues identified and the available evidence under the procedures then in effect.
Questions about crypto regulatory inquiries
Does having one U.S. user automatically decide U.S. jurisdiction
No single fact should substitute for a legal analysis. Jurisdiction and substantive obligations depend on the statute, the conduct, the parties and the relevant U.S. connections. Counsel should assess the particular activity rather than rely on a slogan about global reach.
Can we settle before a public enforcement case
Some matters can be resolved without a contested hearing, while others require litigation or conclude without charges. The available options depend on the agency’s position and the facts. An initial inquiry does not establish that a settlement will be offered or appropriate.
Get help responding to an agency request
Contact info@arkadybukhlawfirm.com with the issuing agency, recipient and response deadline. After a conflict check, Arkady Bukh Law Firm can discuss a defined investigation response and identify any additional specialist work your matter requires.
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