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Joint Operation Leads to Arrest of Online Scam Suspects
A joint operation involving national authorities from Austria, Cyprus, and the Czech Republic has resulted in the arrest of six individuals connected to an online scam related to the sale of rights or tokens for a supposed new cryptocurrency. Supported by Eurojust and Europol, the coordinated action led to the seizure and freezing of assets totaling €2 million.
- Search warrants were executed
- Main suspects were apprehended
Fraudulent Scheme Details
The fraudulent scheme took place between December 2017 and February 2018. The scammers posed as operators of a legitimate online trading company that had allegedly launched a new cryptocurrency. They offered 10 million tokens or rights to the new currency for sale, accepting payments in established cryptocurrencies such as Bitcoin and Ethereum.
To gain credibility with investors, the fraudsters claimed to have developed their own software and algorithm for token sales. However, in February 2018, the perpetrators abruptly closed all their social media accounts and took down the fake company’s website, executing what is commonly known as an exit scam. This move exposed the fact that investors had been deceived, resulting in losses estimated at around €6 million.
Not all victims of the fraud have been identified at this stage.
Instagram Influencer Sentenced for Crypto Ponzi Scheme
In another incident, Instagram influencer Jebara Igbara, known as “Jay Mazini,” has been sentenced to seven years in prison for orchestrating a multi-million dollar crypto Ponzi scheme. Igbara, a 28-year-old from New Jersey, pleaded guilty to fraud charges, confessing to running a Ponzi scheme that involved cryptocurrency fraud and resulted in approximately $8 million in illicit gains.
The money was used to fund an extravagant lifestyle, including luxury cars and excessive gambling.
Queensland Police Take Action Against Crypto Investment Fraud
More recently, Queensland Police took action against an alleged crypto investment fraud operating on the Gold Coast, resulting in the arrest and charging of four individuals. The investigation, led by the Financial and Cyber Crime Group Money Laundering Unit, began in July 2022.
The search focused on companies including Crypto Advisers Australia, Strategic Capital, Active Marketing Solutions, and Alternative Capital, which were suspected of engaging in fraud and money laundering activities.
Web3 Hackers and Fraud Statistics
As reported, the first quarter of this year has seen $336 million lost to Web3 hackers and fraud, with nearly half of the capital stolen in January alone.