Eu’s criminal justice agency, EuroJust, has carried out raids across Europe to dismantle a crypto scam that caused €15 million in losses.
EU Goes After Crypto Investments Scam
EuroJust worked with authorities in Italy and Albania to tackle an online investment crypto scam and seized €3 million worth of assets. The agency noted that the online investment fraud was carried out by a syndicate of crime groups based in these countries.
The organized crime group operated out of a call center in Tirana. The group used VPNs and untraceable virtual phone numbers to contact victims over the phone. After asking victims to register on a portal, they collect the money transferred and reset the newly created account. Once done, the group embezzles the money and disappears.
EuroJust detailed the method used:
The suspects allegedly contacted the victim by phone using an unidentified virtual number and a delocalized virtual private network. They asked the victim to create an account on the portal. , once the transfer was completed, reset the newly created account, embezzled the received amount and made it untraceable.
Perpetrators gained the trust of their victims by enabling them to secure instant financial returns for a small initial investment. After consulting a seemingly reputable online trading platform, Victims were contacted by “brokers” offering lucrative investments in cryptocurrencies with zero risk.
The gang then accessed the victim’s savings bank account, asking them to invest their savings in the scam.
BTC/USD trades at $16,844 on 6-month chart. Source: TradingView
In the final stages, the victim was contacted by other gang members and persuaded to invest more to recover lost funds. From current estimation, the loss from the scam is a total of €15 million. The raids were conducted in 13 locations in Albania. 160 electronic devices and 11 assets were seized.
Crypto Scams Have Grown Since 2020
The report noted that five centralized exchanges had more than $1 billion of exposure to these scams. 17 crypto exchanges had over $100 million exposure, and 93 exchanges had $1 million exposure.
Crypto scams by exchanges. Source: Solidus
The report noted:
Almost every major crypto exchange is impacted. These exchanges are required to prevent money laundering under the regulatory regimes in every jurisdiction in which they operate. Further, they face additional regulatory requirements in many jurisdictions regarding investor protection and market abuse prevention.
Solidus claims that 2022 became the year in which honeypots were the most successful crypto scams. The Squid Game token scam grew 45,000% in a few days and ended with the anonymous founders fleeing with thousands of dollars of investor funds.
Featured image from Patch, chart from TradingView.com