$22 Million Crypto Scam Dupes 40,000 Investors

A massive crypto scam has left around 40,000 investors defrauded of approximately $22 million. The scheme, which involved a fraudulent investment platform, has led to multiple convictions in Austria, revealing a web of deceit and luxury funded by the victims' money.

Key Takeaways

• Total Losses: Approximately $22 million defrauded from 40,000 investors.
• Convictions: Five individuals convicted, with sentences ranging from 18 months to five years.
• Fraudulent Operations: Involved investments in EXW Wallet and crypto tokens, promising unrealistic returns.

The Scheme Unveiled

The fraudulent operation centered around investments in the EXW Wallet and EXW crypto tokens, which promised enticing daily returns of 0.1% to 0.32%. This attractive offer lured many unsuspecting investors into the trap.

Launched in 2019, the EXW Wallet began to falter in 2020, leading to a series of investigations. By September 2023, authorities had identified eight suspects, accusing them of money laundering, operating a pyramid scheme, and commercial fraud.

Court Proceedings and Sentences

The Klagenfurt Regional Court has been at the center of what is being dubbed Austria’s largest fraud trial. The proceedings spanned over a year, involving:

• 60 days in court
• 300 hours of negotiations
• 3,000 case files

As of October 23, five of the accused have been convicted. The sentences include:

• Two individuals: 5 years without parole
• Two others: 30 months
• One additional defendant: 18 months
• Five defendants: Acquitted

Some of the convicted individuals are reportedly planning to appeal their sentences.

Investigative Challenges

Prosecutor Caroline Czedik-Eysenberg highlighted the complexities of the case, noting that the scam involved operations across multiple countries, some of which lack extradition treaties, such as the UAE. The fraudsters employed various tactics to obscure their financial trails, including:

• Encrypted communications via Telegram
• Transporting cash in plastic bags to Austria

Czedik-Eysenberg emphasized that the operation was never intended to pursue legitimate projects, with initial promises merely designed to attract victims. Defense attorneys, however, argue that some defendants lost control as the scheme expanded beyond their management capabilities.

Additional Allegations

In addition to the crypto scam, separate charges are being pursued in a cannabis-related fraud case, where it is estimated that $17.2 million has been stolen from over 17,000 individuals. This highlights a broader pattern of fraudulent activities linked to the same group of individuals.

The fallout from this scam serves as a stark reminder of the risks associated with cryptocurrency investments, particularly in schemes that promise unusually high returns. As investigations continue, authorities are working to ensure that justice is served for the thousands of victims affected by this elaborate fraud.

Sources

• Luxury Cars & Wild Parties: $22 Million Crypto Scam Dupes 40,000 Investors, Bitcoinist.