EU Agencies To Clamp Down On Cross-Border Crypto Scammers

European Union law enforcement agencies have joined forces to crack down on notorious cross-border crypto scammers.

Eurojust and Europol have been working with Bulgaria, Germany, Cyprus, and Serbia to catch online investment fraudsters since July 2022.

Latest reports revealed that the scammers have changed their strategies and started to defraud unsuspecting crypto investors trying to recover from year-long losses.

Europol Uncovers Millions Of Euros Worth Of Losses To Crypto Scams

Eurojust and Europol are working with digital businesses to stop European crypto scams. During their investigation, they exposed a criminal group that operates from call centers. The report revealed that German investors lost over $2.1 million to these online crypto scams.

According to Europol, the scammers beguiled victims from different countries to invest in fake digital asset investment schemes and rob them of their funds. This problem led to a joint operational task force for cross-border investigations within the EU.

Europol said the scammers operated from four call centers in Europe. They lure their victims by offering high profits on small investments. The lucrative profits motivate the victims to invest more funds, with which the scammers disappear. Given the number of unreported cases, Europol suspects the loss could be in hundreds of millions of euros.

The agency questioned 261 individuals (two in Cyprus, two in Bulgaria, three in Germany, and 214 in Serbia) and searched 22 locations within the EU during the investigation. They arrested 30 individuals and seized hardware wallets, vehicles, cash, documents, and electronic equipment.

More Proactive Measures As Losses To Crypto Scams And Hacks Increase

There has been an increasing rate of scam operations impersonating top businesses and government authorities in the digital asset industry. Recent reports revealed that scammers are posing as government officials to exploit vulnerable individuals looking for means to recover lost funds after the FTX crisis.

Oregon Division of Financial Regulation (DFR) issued a press release warning crypto traders against face websites and applications aimed to snatch money from them. In addition, the DFR advised traders to conduct proper research before sending funds to crypto trading platforms. The agency cited a website claiming ownership by the United States Department of State as an example.

According to the DFR, the site claimed to be helping FTX customers recover their funds. With its claims, the website accessed investors’ usernames and passwords. Therefore, the DFR Administrator, T. K. Keen, urged crypto traders to protect their information diligently and not release sensitive data without conducting research.

Meanwhile, a December 26 report revealed the court sentenced executives involved in a South Korean digital asset exchange fraud to eight years in prison.

The officials participated in a $1.5 billion fraud that defrauded 50,000 investors, promising them 300% returns on investment. Six executives received their sentence, while three pleaded not guilty to some charges and would face the court soon.

Immunefi, a bug bounty, and security service platform, recently reported that the crypto industry lost $3.9 billion to scams in 2022.

CEO of Immunefi, Mitchell Amador, advised that proactive identification and addressing vulnerabilities would help protect the community and restore trust among investors.