As a researcher with years of experience in the field of financial crimes, I have witnessed the evolution of scams and frauds, from traditional Ponzi schemes to the more complex ones involving cryptocurrencies. The sentencing of the individuals linked to the EXW-Token scam in Austria serves as a stark reminder that these criminals, despite their lavish lifestyles, will eventually face justice.
In a significant case for Austria, five people connected to the EXW-Token scam have been imprisoned by the court, marking one of the most substantial cryptocurrency fraud trials ever held within the nation.
Based on reports from local news sources, the verdict came after a 12-month trial and two months of hearings during which multiple people were convicted for masterminding a deceitful operation related to the EXW cryptocurrency token and the EXW digital wallet.
In this scenario, it is claimed that the suspect made false promises about substantial profits from non-existent investment tokens. Additionally, they were marketing other businesses under the EXW label, such as a property development company and a vehicle leasing service.
As an analyst looking back, I find myself reflecting on the intricate web of deception that was the EXW wallet, a multi-level marketing (MLM) cryptocurrency venture launched in 2019. Regrettably, it succeeded in swindling at least 40,000 unsuspecting investors out of an estimated 20 million euros, equivalent to approximately $21.6 million USD. The allure was the promise of daily returns ranging from 0.1% to a staggering 0.32%.
The scam eventually collapsed in 2020 but was allegedly rebooted and rebranded as Exchange World.
The funds accrued by the bad actors were used to support an extravagant lifestyle which the report labelled as akin to something “straight out of a Hollywood movie.”
The accused frequently enjoyed extravagant experiences such as driving expensive cars, traveling by private jets, attending exclusive nightclub events, and living in homes adorned with lavish decorations like a villa boasting a shark aquarium and stacks of money in shoeboxes.
The procedure had its base in Dubai, and it is claimed that some of the ill-gotten funds were transferred to Austria by the suspects.
As a crypto investor, I’ve learned that two individuals involved in the case were given five-year prison sentences by the Klagenfurt Regional Court due to their roles. Two others received sentences of 30 months, with 21 of those months suspended for a probationary period of three years. Another individual was given an 18-month suspended sentence.
The defendants argued that their goal was to manage genuine financial ventures, yet matters spiraled uncontrollably. However, the court rejected this assertion, declaring that the scheme was deliberately orchestrated as a fraud from its inception, with no genuine earnings ever intended.
In September 2023, Benjamin Herzog and Pirmin Troger, two founders of EXW wallet, admitted guilt for fraudulent activities and were both given a sentence of five years imprisonment. On the other hand, Manuel Batista, another co-founder, continues to elude authorities.
Crypto frauds on the rise
Investment scams involving cryptocurrencies are increasingly common, as con artists take advantage of the promise of substantial profits and the intricate nature of blockchain tech to swindle unsuspecting investors. These deceitful practices frequently entail fabricated projects, pyramid-like structures reminiscent of Ponzi schemes, or misleading Initial Coin Offerings (ICOs).
Global regulatory bodies are growing stricter in their efforts to stamp out deceitful practices within the crypto market, aiming to safeguard investors and uphold confidence in this digital investment landscape.
On October 22nd, a fraud case began in France against 20 people suspected of being part of a cryptocurrency scam. This scheme reportedly deceived investors out of approximately $30 million under the guise of promising crypto investments. Interestingly, just a few days prior to this, an individual from India was given a five-year prison sentence for swindling investors out of more than $20 million by falsifying transactions on Coinbase, one of the world’s major cryptocurrency exchanges.
In another instance, a court in the United States has mandated that the mastermind behind the Forcount Ponzi scam should repay approximately $3.6 million as compensation and spend 20 years in prison.
Regardless of the harsh penalties, con artists continue to persist at an alarming rate. As per an FBI report, frauds and scams related to cryptocurrencies and digital assets amassed losses exceeding $5.6 billion in 2023 itself, representing a 45% increase compared to the previous year.
In August, it was reported by the Irish national police that more than 45% of investment scams within their country were focused on cryptocurrencies.
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2024-10-24 14:30