International law enforcement agencies have cracked down on a cryptocurrency scam orchestrated by a group of Austrians, recovering millions of Euros in a coordinated international effort.
The bust involved authorities from Austria, Cyprus, and Czechia, with support from Europol (the European Union’s law enforcement agency) and Eurojust (the EU’s judicial cooperation unit).
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Fake Cryptocurrency, Real Fraud
The scam centered around a fake cryptocurrency launched in December 2017. The perpetrators created a seemingly legitimate online trading company that offered an Initial Coin Offering (ICO) – a way to raise funds by selling digital tokens representing a new cryptocurrency.
Investors were enticed by promises of 10 million new tokens and a unique algorithm developed by the company. However, red flags emerged: the team behind the project remained anonymous, and communication channels went dark in February 2018. The company’s website and social media accounts vanished, leaving investors high and dry – a classic hallmark of an “exit scam.”
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Unearthing the Scheme
The investigation, bolstered by Europol’s analytical expertise and Eurojust’s coordination, revealed the Austrian connection. Five operational meetings facilitated information sharing, and a Europol specialist even deployed to Cyprus to provide on-the-ground support.
On the action day, a central communication hub coordinated by Eurojust ensured seamless execution of European Arrest Warrants and search warrants across participating countries.
Millions Recovered, Justice Served
The sting resulted in the arrest of six Austrian nationals. Law enforcement seized over €500,000 in cryptocurrency, €250,000 in traditional currency, and froze dozens of bank accounts. Additionally, two luxury cars and a property valued at €1.4 million were confiscated.
The investigation is ongoing, with authorities aiming to identify all victims of this fraudulent scheme.
Participating Authorities:
- Austria: Criminal Intelligence Service Austria (Bundeskriminalamt – Cybercrime Competence Center (C4)), Specialised Prosecution Office for the Fight Against Economic Crimes and Corruption (Wirtschafts- und Korruptionsstaatsanwaltschaft)
- Cyprus: Cyprus Police in Larnaca
- Czechia: Police of the Czech Republic, National Organised Crime Agency (Národní centrála proti organizovanému zločinu – NCOZ)
Participating Agencies:
This case highlights the growing importance of international collaboration in combating cryptocurrency crime. Investors are advised to exercise caution when dealing with ICOs, prioritizing transparency and well-established teams behind the project.
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