Cryptocurrencies are fascinating but also dangerous as they are attracting cybercriminals luring people to invest in schemes that do not exist. The world’s largest advertising platforms like Google and Facebook are tracing fraudsters who make people lose their life savings thinking they are investing in cryptocurrencies. An international law enforcement action has now closed four call centers that made people invest large amounts in fake cryptocurrencies programmes. Losses could be counted in hundreds of millions of euros, according to Europol.
The criminal network, comprising a number of different criminal actors was operating through call centres luring victims into investing large amounts of money into fake cryptocurrency schemes.
Authorities from Bulgaria, Cyprus, Germany and Serbia, supported by Europol and Eurojust, participated in the action. The investigation prior to the action jas been ongoing since June last year.
The action led to the closing of four call centres in Eastern Europe, 14 arrests in Serbia and one in Germany; 261 individuals questioned, some of whom are awaiting prosecution (42 in Bulgaria, 2 in Cyprus, 3 in Germany and 214 in Serbia); and checks of companies and residences in Serbia, Cyprus and Bulgaria.
Europol says the suspects used advertisements on social networks to lure victims to websites covertly operated by the criminals, which offered seemingly exceptional investment opportunities in cryptocurrencies. The victims would first invest low, three-digit sums.
“Fake price hikes leading to supposedly lucrative profits for investors then persuaded them to make transfers of higher amounts.”
Europol estimates that the financial damage to German victims is over two million euro, while other countries such as Switzerland, Australia and Canada also have victims.
“The investigation suggests that the number of unreported cases is likely to be much higher. This would mean that the illegal gains generated by the criminal groups, with at least four call centres in eastern Europe, may be in the hundreds of millions of euro.”
For years, global fake advertising featuring celebrities and made-up news stories are used to persuade people to invest in cryptocurrencies promising investors huge profits.
But the investors lose their money and many are tricked to put in even more money not to risk losing what they have already invested. It is unfortunately though all a scam, with companies working globally using fake ads with pictures of celebrities and fantasy news stories about successful investments in order to make, especially elderly, savers to invest.
The scam is often focusing European countries but is also reported from for instance Australia and Latin America, a map from non-profit network Organized Crime and Corruption Reporting Project (OCCRP) shows.
Publishers in many countries and Google and Facebook are trying to get to grips with the fake ads that are a threat to well-known and serious publishers´ trustworthiness when the fake ads and news stories are published on their websites.
Publishers say it is the big IT companies´ responsibility to see to that the fake ads are stopped with Facebook and Google answering that they are investing heavily to come to grips with the ads. However, fraudulent advertising companies often find ways around the control systems the IT companies are setting up.
Investigative journalism network OCCRP has in cooperation with a number of publishers investigated how the fake investment business is operated. Publishers have also contributed stories about savers who have been persuaded to put up all their savings and in many cases also been talked into taking loans to go on investing in fake businesses.
Publishers like The Guardian, Le Monde, Buzzfeed News, Swedish Dagens Nyheter and Finnish Helsingin Sanomat have published stories in cooperation with OCCRP pointing out advertising companies behind frauds with cryptocurrencies.
Through relentless onslaughts of phone calls and emails, an army of young sales people scam people around the world who are vulnerable to their sales pitch, whether that was because they were elderly, infirm, naive — or simply optimistic, the OCCRP reports.
The complications with investing in unregulated cryptocurrencies was illustrated by US authorities when the treasury department prior to the collapse of Sam Bankman-Fried’s crypto empire FTX, that is now a US court case, warned that un regulated cryptocurrencies could pose a risk to the US financial system.