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Dismantling an Austria-based fraud scheme offering a new type of crypto currency | Eurojust
National authorities in Austria, Cyprus and the Czech Republic have taken decisive action against an online scam pretending to sell rights or tokens to a supposed new cryptocurrency. In a coordinated operation, supported by Eurojust and Europol, the six main suspects were arrested and six locations searched. In total, assets worth 750,000 euros, a property worth 1.4 million euros and two cars were frozen/seized.
Between December 2017 and February 2018, scammers pretended to have created a real online trading company that had launched a new cryptocurrency. They offered 10 million tokens or respective rights to the new currency for sale. Investors paid them in regular cryptocurrencies like bitcoin or ethereum. The Austrian scammers also claimed to have developed their own software and algorithm for selling tokens in order to gain credibility with investors.
In February 2018, the perpetrators closed all their social media accounts and took the homepage of the fake company offline. This so-called exit scam made it clear to investors that they had been scammed. They lost around 6 million euros. At this time, not all victims of the fraud have been identified.
Eurojust supported the day of action against online fraud with a coordination centre, enabling real-time communication between all authorities involved. This also enabled the rapid execution of European arrest warrants and search warrants. Europol assisted the operation with a mobile office in Cyprus. Austrian police officers were present at the scene during a search in Cyprus.
Europol specialists organized five operational meetings and worked closely with the Austrian office at Eurojust, providing a holistic analysis of the investigation. In addition to supporting the virtual command post established at Eurojust, Europol sent a specialist with a mobile office to Cyprus to support operational activities and facilitate the exchange of information.
The following authorities coordinated and supported the field operations:
- Austria: Central Prosecutor’s Office for the Fight against Economic Crimes and Corruption; Austrian Criminal Intelligence Service – Cybercrime Competence Center (C4)
- Cyprus: Cyprus Police
- Czech Republic: National Agency for Organized Crime