EU investigators dismantle €100M crypto scam across 23 countries

Investigators from several EU member states have stopped a major crypto scam that resulted in heavy losses for defrauded investors in about two dozen countries.

Eurojust, the European Union’s agency for judicial co-operation in criminal cases, unveiled that the scheme had been running for quite a few years, before it was recently dismantled.

Eurojust-led operation targets massive crypto fraud

Acting on request by authorities in Spain and Portugal, Eurojust coordinated a major law enforcement operation in Europe aimed at halting what it described as an elaborate investment fraud using cryptocurrencies as bait.

Five suspects were arrested on an action day, the agency announced Tuesday, adding the scam’s alleged leader was among those taken into custody.

They are believed to have defrauded over a hundred victims in Germany, France, Italy, Spain, and other countries, out of at least €100 million (over $118 million).

As part of the joint effort, law enforcement authorities conducted searches in five locations in Spain, Portugal, Italy, Romania, and Bulgaria, the press release further detailed. They have also frozen bank accounts and other financial assets.

Besides organizing the scheme, its alleged mastermind is also suspected of large-scale money laundering, as Eurojust highlighted in the announcement, quoted by media outlets in the affected jurisdictions.

The perpetrators are accused of offering high returns on investments in various cryptocurrencies through what looked like professionally designed online platforms.

Large portions of the investments were eventually diverted to bank accounts, mostly Lithuanian, in order to launder the proceeds.

When victims attempted to recover their funds, they were initially told they needed to pay additional fees. Later, the website they were lured to would suddenly disappear.

Eurojust said targeted investors lost most or even all of their money in some of the investigated cases.

Fraudsters scammed victims for years before getting caught

The scam had been active for several years, at least since 2018. It also covered a total of 23 countries, which were either used as destinations for the stolen money or as markets where the victims were found.

Eurojust helped form an investigation team with Spanish and Lithuanian participation, which assisted in the exchange of information about the fraud scheme.

The EU agency also coordinated the joint operation and assisted with the execution of a European arrest warrant as well as investigation orders and asset freezing orders.

Europol, the European Union’s body for law enforcement cooperation, got involved in the case in the fall of 2020. Since September of that year, it has provided operational and analytical support to the national investigative authorities.

Representatives of the European police agency joined the international investigation team and sent a cryptocurrency expert to help Spanish and Portuguese authorities in crypto asset seizures.

Prosecutor’s offices, courts, anti-corruption bodies, financial investigation units, organized crime combating structures, and the police organizations in Spain, Portugal, Italy, Bulgaria, Romania, and Lithuania took part in the operation, Eurojust noted in its press release.

Scammers exploit investor interest in crypto

Crypto-related fraud has been a growing concern for law enforcement authorities across the Old Continent, with criminals often aggressively trying to exploit investor interest in digital assets that spikes with market prices.

Earlier this year, Europol announced several arrests as part of the dismantling of a similar criminal network, which operated in Spain, France, Estonia, and the United States.

The group had allegedly laundered illicit proceeds in the amount of €460 million (around $540 million at the time), after defrauding more than 5,000 victims in different parts of the world.

According to a report published by the Global Initiative Against Transnational Organized Crime, and quoted by Cryptopolitan in May, criminal groups operating in the Western Balkans have been actively using digital currencies to launder dirty money.

And in August, the Central Bank of Russia revealed it had identified 1,000 pyramid schemes offering quick returns on cryptocurrency investments in the first half of the year alone.

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