Reinvesting in RICO with Cryptocurrencies: Using Cryptocurrency Networks to Prove RICO’s Enterprise Requirement

Authors

Andrew Robert Klimek, Washington and Lee University School of LawFollow

Abstract

This Note received the 2019 Roy L. Steinheimer Law Review Award.

This Note argues that the Racketeer Influenced and Corrupt Organizations Act (RICO) may be suited to cryptocurrency prosecutions. RICO subsection 1962(a) addresses the infiltration of an enterprise by investing proceeds from racketeering activities and this Note contends that a cryptocurrency network could serve as the “enterprise” required by the statute. Instead of having to investigate and prove the relationships in an underlying criminal enterprise, proponents of a RICO case against crypto-criminals could rely on well-documented and publicly available information about the cryptocurrency network to prove the enterprise and the relationships among its members. If accepted by courts, prosecutors and plaintiffs could proceed under investing subsection with assurances that the “enterprise” element of the statute would be satisfied. In addition to punishing criminals, this proposed method would also benefit legitimate cryptocurrency users by discouraging criminals from infiltrating legitimate cryptocurrency businesses.

In order to provide some background, this Note will first summarize the history of cryptocurrencies and RICO. Next, this Note will explore the elements of a RICO claim and the current methods of prosecuting cryptocurrency criminals. The discussion will turn to how cryptocurrency networks could be used to satisfy the enterprise element of the RICO statute. This Note will then examine some potential criticisms of cryptocurrencies as a RICO enterprise. The discussion will conclude with some thoughts regarding the prudence of cryptocurrency prosecutions under RICO and what type of cryptocurrency cases should be prosecuted under RICO. In essence, this Note argues that prosecutors should be able to demonstrate that a criminal using cryptocurrencies has infiltrated an enterprise in violation of RICO, but should exercise restraint unless the criminal is engaging in criminal activities on the scale of traditional organized crime.

Recommended Citation

Andrew Robert Klimek, Reinvesting in RICO with Cryptocurrencies: Using Cryptocurrency Networks to Prove RICO’s Enterprise Requirement, 77 Wash. & Lee L. Rev. 509 (2020).
Available at: https://scholarlycommons.law.wlu.edu/wlulr/vol77/iss1/9