European Union law enforcement has joined forces to crack down on notorious cross-border 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 defrauding unsuspecting crypto investors who are trying to recover from year-long losses.
Europol uncovers millions in losses from crypto scams
Eurojust and Europol are working with digital companies to stop European crypto scams. During their investigation, they exposed a criminal group that operates out of call centers. The report revealed that German investors lost over $2.1 million to these online crypto scams.
According to Europol, the scammers tricked victims from different countries into investing in fake digital asset investment schemes and depriving them of their funds. This problem has led to the creation of a joint operational working group 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 the hundreds of millions of euros.
The agency interviewed 261 people (two in Cyprus, two in Bulgaria, three in Germany and 214 in Serbia) and searched 22 locations across the EU during the investigation. They arrested 30 people and seized hardware wallets, vehicles, cash, documents and electronic equipment.
More proactive measures as losses from scams and crypto hacks increase
There has been an increasing rate of fraudulent operations impersonating prominent companies and government authorities in the digital asset industry. Recent reports revealed that scammers pose as government officials to exploit vulnerable people looking for ways to recover lost funds after the FTX crisis.
The Oregon Division of Financial Regulation (DFR) has issued a Press release warning crypto traders against websites and apps aimed at extracting money from them. Furthermore, the DFR advised traders to conduct proper research before sending funds to crypto trading platforms. The agency cited a website claiming ownership of the United States Department of State as an example.
According to the DFR, the site claimed to help FTX customers recover their funds. With its claims, the website gained access to investors’ usernames and passwords. Therefore, DFR Administrator TK Keen urged crypto traders to protect their information diligently and not to disclose sensitive data without research.
Meanwhile, a December 26 report revealed that the court sentenced executives involved in a South Korean digital asset exchange fraud to eight years in prison.
Officials participated in a $1.5 billion fraud that defrauded 50,000 investors, promising them a 300% return on investment. Six executives have received their sentences, while three have pleaded not guilty to some charges and will soon be brought to trial.
Immunefi, a bug bounty and security services platform, recently reported that the crypto industry lost $3.9 billion to scams in 2022.
Immunefi CEO Mitchell Amador said proactively identifying and resolving vulnerabilities would help protect the community and restore trust among investors.