The Spanish police cracked down on a crypto-related fraud ring

Europol announced the organized arrests of a criminal network connected to cryptocurrency investment fraud. The network involved teams in Spain, France, Estonia, as well as the USA.

Europol cracked down on a network spreading crypto-related investment fraud. The scammers operated in Spain, France, Estonia, as well as the USA. Law enforcement arranged a series of arrests at the end of June. 

‘To carry out their fraudulent activities, the leaders of the criminal network allegedly used a net of associates spread around the world to raise funds through cash withdrawals, bank transfers, and crypto-transfers,’ Europol said in a statement.

The Spanish Guardia Civil acted with aid from Europol and law enforcement authorities from Estonia, France, and the USA, to arrest five members of a criminal network linked to investment fraud. The law enforcement performed three searches and arrests on the Canary Islands, and two in Madrid. 

Europol cracks down on aggressive crypto marketing

The recent round of scams was not the usual crypto-native operation. Instead, a network of representatives used phone, email and direct persuasion to sell seemingly lucrative crypto investments. 

Based on Europol reports, the network had laundered EUR 460M (around $540M) from illicit profits, defrauding over 5,000 victims from the entire world. The network has been under investigation since 2023, as Europol’s financial crime experts assisted Spanish authorities. 

On the day of the arrests, a crypto specialist was deployed to Spain to assist national investigators. For now, Europol has not provided on-chain data for the type of fraud. 

The criminal network may have used banking in Hong Kong as well, using payment gateways and user accounts in different names, as well as crypto exchanges to transfer and launder funds. 

Europe becomes the target for confidence scams

While the EU has been relatively favorable for crypto users, scams rely on outsiders who are naive about risks. The current fraud ring is part of the trend for using AI to facilitate the scams. 

Some of the investment solicitations included personal fraud and gaining the confidence of victims. Similar scams have robbed investors of up to $5.5B on a global scale. Solicitations included deepfakes and advertising promising outsized crypto returns. 

Spanish authorities are involved in this type of operations for the second time, after breaking up a crime ring in April. 

The fraud also involved fake platforms that even showed returns and increasing balances. The victims were unable to withdraw their funds, however, or were asked for additional deposits to release the balance. European authorities have warned against trusting the promises for outsized returns, especially if there is a promise of guaranteed earnings. Crypto and stablecoins have been used in some fraud cases, although victims were also solicited to send money via bank accounts, or even through cash withdrawals.

European investors have been targeted with investment solicitations even without mentioning cryptocurrencies. Previously, Europol cracked down on fake investments involving renewable energy. 

The fraud rings use sophisticated research to target their victims with offers. Users have also been persuaded to transfer large sums of money, with solicitations of lucrative renewable energy contracts, entirely unrelated to crypto assets. Most of the rings were discovered after individual complaints and significant personal losses.

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