Crypto Criminals Can Run But They Can’t Hide

In the second week of August, the High Court of Justice in London ordered Binance, one of the world’s largest cryptocurrency exchanges, to identify hackers and freeze their accounts after a victim lost the equivalent of about $2.6 million. It was a precedent-setting ruling, and signals to crypto scammers the world over that the judiciary is ready to use its powers to find them. But it did not come as a surprise, since crypto criminals have been caught and brought to justice throughout the world in increasing numbers since the beginning of the year.   

Crypto News in the United States

In January, the U.S. District Court in New York sentenced the owner of RG Coins, a Bulgarian bitcoin exchange, to 121 months in a federal prison for his participation in a transnational online auction fraud that conned over 900 Americans out of more than $7 million. What’s more, he is the seventeenth member of his Romania-based fraud network to be convicted. 

In February, a former Australian student pleaded guilty in New York to one count of securities fraud as part of a plea deal for operating a Ponzi scheme disguised as a crypto-based hedge fund. 

In March, the founder of a defunct Florida cryptocurrency firm was sentenced to eight years in prison for having cheated investors out of more than $36 million. He had paid celebrities including boxer Floyd Mayweather and music producer DJ Khaled to promote his business.

In April, the Swedish operator of “Bitcoin Fog” was arrested at Los Angeles International Airport on charges of money laundering, operating an unlicensed money transmitting business and money transmission without a license. In July he was sentenced to 15 years in federal prison. The U.S. Department of Justice called Bitcoin Fog “the longest-running bitcoin money laundering service on the darknet.” Allegedly, it processed over 1.2 million bitcoin transactions (worth approximately $335 million) related to narcotics smuggling, computer fraud and abuse and identity theft. 

Crypto News in Europe

In May, six suspects were arrested in connection with a €30 million online cryptocurrency investment scam that had targeted hundreds of people across the continent following raids in five different countries. 

Meanwhile, the exceptionally large number of cryptocurrency-related trials waiting to be held in Spanish courts was reported to be delaying proceedings in June. Among the defendants were the Algorithms Group, which is accused of scamming more than €280 million from over 300 investors; Nimbus, a crypto investment Ponzi scheme that is estimated to have defrauded €136 million from more than 4,000 investors; and the Kuailian and Arbistar 2.0 Ponzi schemes, which are charged with money laundering.

Also in June, Russian police began investigating a financial firm called Finiko that is suspected of running a series of crypto-related Ponzi schemes that are estimated to have scammed the crypto equivalent of $95 million from their victims. The first of Finiko’s three founders was arrested in July, and in August the two others were put on the country’s most wanted list. 

Finally, British detectives seized a USB stick in August containing $9.5 million worth of ethereum. An additional $12.7 million in crypto was seized a few days later when police gained access to a “cryptograph safety deposit box” and the code that was required to access it. Two suspects were arrested and their website was shut down. Their victims reside in the UK, U.S., Europe, China, Australia, and Hong Kong. Efforts are now being made to return the crypto assets to their rightful owners. 

Crypto News in Asia and Australia

In May, a massive six-month Interpol operation in a number of East Asian countries was made public. It involved over 1,400 criminal complaints, of which 892 were solved. A total of 585 individuals were arrested, more than 1,600 bank accounts were frozen as a result and $83 million that victims feared they lost was intercepted. Amazingly, 12 people were also arrested the same month for operating a bitcoin scam in Bangladesh, a country in which most internet crime regularly goes unpunished.

And Down Under, a Sydney solicitor was charged with participating in a cryptocurrency scam that defrauded four victims of more than $2.3 million. 

Crypto News in South America

Following a three-year-long investigation, Brazilian police arrested the president of the Bitcoin Banking Group, a cryptocurrency brokerage in July, together with a number of associates. Known as the “Bitcoin King,” the firm’s president was originally charged with fraud for allegedly scamming some 20,000 victims out of 7,000 bitcoins, worth about $250 million, by locking them out of their accounts. Since then charges of embezzlement, money laundering, operating a criminal organization, and bankruptcy violations have been added. The firm originally claimed that it was hacked, but the police have been able to establish that the Bitcoin King transferred the missing coins into his personal wallet.

Are You the Victim of a Crypto Scam?

So, here’s some breaking crypto news: Law enforcement agencies and courts around the globe are indeed pursuing cryptocurrency crimes, cracking them wide open, arresting the perpetrators, and returning stolen crypto to its rightful owners. If your crypto coin dispute involves crypto mining, a crypto exchange, crypto wallet, crypto trader, crypto malware, or some supposed crypto tax, the process for recovering it is an example of complex dispute resolution. MyChargeBack may be able to help.