Law enforcement officers exposed fraudsters who stole cryptocurrency. How fraudulent schemes work
23 April 09:42
Ukrainian law enforcement officers, in cooperation with their colleagues from the Republic of Latvia and under the coordination of Europol and Eurojust, have stopped the activities of an organized criminal group that defrauded Latvian citizens of more than UAH 6 million. This was reported by the Office of the Prosecutor General of Ukraine, "Komersant Ukrainian" reports.
According to the investigation, the group has been operating since at least 2022, organizing a fraudulent scheme under the guise of investing in cryptocurrencies.
How the scheme worked
The pseudo-investors created fake brokerage platforms that visually resembled legitimate trading sites, and organized work with potential victims through an extensive network of call centers in Ukraine.
The defendants actively advertised their pseudo-investment services on social media, and used social engineering techniques to target potential customers, promising them super profits. At the same time, they persuaded victims to install remote access software, which gave them control over the victims’ devices and access to their financial data.
To legalize the illegally obtained funds, the group members registered as individual entrepreneurs and received payments allegedly for computer programming services.
Law enforcement officers conducted more than 30 searches in several regions of Ukraine at the places of illegal activity, residences of the offenders, and in vehicles. The organizer and three executors were served a notice of suspicion of fraud.
What other cryptocurrency fraud schemes exist
Oleksandr Ulyanenkov, head of the specialized cyberpolice unit, told Ukrainian News about the most common fraud schemes in an interview.
ICO (initial coin offering) scam
These are fake fundraising campaigns for allegedly promising crypto projects. People are offered to invest at an early stage to receive super-profits, and then the organizers simply disappear with the money.
Phishing attacks are very common, when fraudsters create fake crypto exchange websites or send emails with allegedly official requests to enter their data. As soon as the user enters the login and password, his or her account is in the hands of the attackers.
Pyramids and Ponzi schemes
People are promised high profits, but in reality, they receive money at the expense of new investors. As soon as the flow of investors slows down, the scheme collapses, and most participants are left without funds.
Fake airdrops and pranks are also common. People are offered “free crypto” in exchange for a small contribution, but, of course, it is impossible to get anything in return.
Pump & Dump
This is a scheme where a group of fraudsters or influencers artificially inflate the value of a little-known cryptocurrency to lure new investors. When the price increases, the organizers sell their assets, and everyone else is left with devalued tokens.
Today, artificial intelligence is being actively used to create doppelgangers with famous people who allegedly support crypto projects. The more realistic the fraudulent content looks, the more people respond to the offer and get into trouble.
